Gray Television on Friday completed its previously announced offering of $750 million in aggregate principal amount of 7.0% senior notes due 2027 by a special purpose wholly owned subsidiary of Gray with the sole purpose of serving as an “Escrow Issuer.”
It completes a fundraising effort designed to finance, in part, the biggest broadcast media merger of 2018 — one that does not involve Sinclair Broadcast Group or Tribune.
At closing, the proceeds of the notes were funded into an escrow account. The reason is simple: The notes were sold to finance, together with cash on hand and anticipated debt facilities and indebtedness of Gray, the pending acquisition of Raycom Media.
Once the sale is closed, following regulatory approvals, the net proceeds from the offering will be released from the escrow account to fund the deal. Effectively, the Escrow Issuer —Gray Escrow Inc. — will merge with and into Gray.
Following the assumption, the notes will be guaranteed, jointly and severally, by each existing and future restricted subsidiary of Gray that guarantees Gray’s existing senior credit facility.
Interest on the Notes accrues from today (11/16) and is payable semiannually, on May 15 and November 15 of each year, commencing May 15, 2019.
The Notes mature on May 15, 2027.
The Notes and the related guarantees have not been, and will not be, registered under the Securities Act of 1933 or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption therefrom. The Notes were offered only to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S.