ATLANTA - Gray Television, Inc. (NYSE:GTN), a leading multimedia company, announced today its initiative to refinance a significant portion of its near-term debt obligations. The company is targeting the refinancing of its $1.15 billion term loan due in 2026 and up to $450 million of its 5.875% senior notes also maturing in 2026.
The strategy involves securing approximately $750 million in new senior secured term loans with a maturity date in 2029, alongside roughly $750 million in additional senior secured debt. The refinancing plan also includes utilizing cash on hand and drawing approximately $100 million from its revolving credit facility due in 2027.
In a related move, Gray Television revealed it has received commitments to increase its revolving credit facility, which is set to mature on December 31, 2027, from $552.5 million to $680 million. Upon closing of this upsized credit facility, the company intends to terminate a separate $72.5 million credit facility that would mature on December 1, 2026.
This step follows a February 2024 decision to upsize and extend its revolving credit facility, boosting its total capacity from $500 million to $680 million and extending the maturity date to the end of 2027.
The terms of these proposed refinancing transactions are to be disclosed upon their completion, and the execution of these plans is subject to market conditions and customary closing conditions. Gray Television has cautioned that there can be no assurance regarding the timing, terms, or interest rates of the planned refinancing, or even certainty that the transactions will be completed as proposed.
This announcement contains forward-looking statements based on the company's current expectations and assumptions. Still, these statements are not guarantees of future performance and are subject to risks, trends, and uncertainties that could cause actual results to differ materially.
Gray Television, headquartered in Atlanta, Georgia, is known for being the largest owner of top-rated local television stations and digital assets in the United States. Its portfolio includes television stations that collectively reach approximately 36% of U.S. television households, with a presence in 79 markets with the top-rated television station and 102 markets with the first or second highest-rated television station.
The information reported is based on a press release statement and reflects management’s views as of today.
InvestingPro Insights
As Gray Television, Inc. (NYSE:GTN) gears up for a major refinancing effort, the company's financial health and market performance become focal points for investors. With a market capitalization of $631.16 million, Gray Television is navigating through a challenging period. The company's stock has been notably volatile, which might raise concerns for risk-averse investors.
Still, this volatility has been accompanied by a strong return over the last month, with a 23.67% increase in price total return, showcasing a potential upside for those willing to embrace the fluctuations.
On the valuation front, Gray Television is currently trading at a low Price / Book multiple of 0.31, as of the last twelve months leading up to Q1 2024. This could indicate that the stock is undervalued relative to the company’s book value, potentially presenting an attractive entry point for value investors. Despite recent revenue declines, with a -9.51% change in the last twelve months as of Q1 2024, analysts predict a brighter horizon with expectations of net income growth this year.
An InvestingPro Tip that stands out in the context of Gray Television's refinancing strategy is the company's liquidity position. Gray Television's liquid assets exceed its short-term obligations, which may provide some assurance to investors and creditors alike regarding the company's ability to meet its immediate financial commitments. This financial stability could be a key factor in the success of the refinancing plan.
For investors seeking a more in-depth analysis, there are additional InvestingPro Tips available, offering insights such as predictions on profitability and detailed metrics on the company's financial performance. To access these valuable tips and more, visit https://www.investing.com/pro/GTN and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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