Gray Television was able to secure slightly cheaper pricing for a new $450 million credit facility backing its acquisition of Stations Holding. Jim Ryan, cfo, said the Atlanta company was able to receive more favorable pricing because the acquisition of the 15 network-affiliated television stations--now known as Gray MidAmerica Television--increased and improved Gray Television's operating base, thereby enhancing its overall credit quality.
The new facility consists of an eight-year, $375 million "B" piece and a seven-year, $75 million revolver. In addition to backing the acquisition, the new facility refinances a $300 million credit comprised of an eight-year, $50 million revolver priced at LIBOR plus 3% and a nine-year, $250 million term loan "B" priced at LIBOR plus 31/ 4%. The new deal originally bore the same pricing as the former one, but pricing on the new "B" piece was flexed down to LIBOR plus 3% during syndication.
Despite completing the former facility last September, the company had to come back to the market for a refinancing because of the magnitude of the increase in the credit's size, Ryan explained. The bank deal now holds an option for a $300 million incremental facility, he noted.
Wachovia Bank, Bank of America and Deutsche Bank serve as administrative agent, syndication agent and documentation agent, respectively. Ryan noted that Gray Television has a long-term relationship with Wachovia and B of A. "Deutsche Bank is an expanding relationship," he said, adding that the bank served as book manager on a follow-on equity offering conducted in conjunction with the acquisition.