The E.W. Scripps Company’s wholly owned subsidiary, Scripps Escrow, has priced an offering of $500 million in aggregate principal amount of 5.875% new senior notes.
The notes are due in 2027 and priced at 100% in a private offering.
The amount represents an upsizing of the initial offering by $100 million, due to strong demand and favorable pricing for the company. The sale of the notes is expected to close on or about July 26.
The escrow issuer, which was created solely to issue the notes, will deposit the gross proceeds of the offering into a segregated escrow account until the date that certain escrow release conditions are satisfied.
On March 20, Scripps announced it would acquire eight stations in seven markets that are being divested in connection with Nexstar Media Group’s pending acquisition of Tribune Media, for $580 million. Upon the closing of the Nexstar acquisition, the escrow issuer will merge with and into the company, and the escrow proceeds will be released to the company. The company will then assume the obligations under the notes, and the notes will become senior unsecured obligations of the company.
The notes will be guaranteed by certain of the company’s existing and future subsidiaries.
Scripps will finance the acquisition with $400 million of the note proceeds as well as $180 million of cash from the balance sheet. The additional $100 million will be used to repay outstanding amounts under the company’s revolving credit facility.
Scripps’ net leverage, pro forma for the issuance of the notes, would be 5.3x, based on pro forma annual average adjusted EBITDA of $363 million for the last eight quarters ended March 31.
The acquisition will grow the Scripps local television station portfolio to 62 stations in 42 markets with a reach of 31% of U.S. TV households.
