7. Debt

Long-term debt consisted of the following, as of December 31 (in thousands):

	2017			2016
Term loans, net of financing costs and discount of $57,547 and $6,592, respectively	$	2,791,875		$	662,206
Revolving loans		3,000			2,000
6.875% Senior unsecured notes due 2020, net of financing costs and discount of $4,295		-			520,705
6.125% Senior unsecured notes due 2022, net of financing costs of $1,992 and $2,402, respectively		273,008			272,598
5.875% Senior unsecured notes due 2022, plus premium of $8,102		408,102			-
5.625% Senior unsecured notes due 2024, net of financing costs of $13,525 and $15,090, respectively		886,475			884,910
		4,362,460			2,342,419
Less: current portion		(92,808	)		(28,093	)
	$	4,269,652		$	2,314,326

Nexstar Senior Secured Credit Facility

In January 2017, Nexstar borrowed a $2.518 billion senior secured Term Loan B, issued at 99.49%, due January 17, 2024 and a $293.9 million senior secured Term Loan A, issued at 99.34%, due January 17, 2022. The proceeds from these loans were primarily used to finance the cash consideration of Nexstar’s merger with Media General (see Note 3) and to refinance Nexstar’s then existing Term Loan B and Term Loan A with outstanding principal balances of $256.2 million and $135.4 million, respectively. In January 2017, Nexstar also issued a $169.0 million revolving loan commitment, maturing on January 17, 2022, of which no amount was drawn. This facility replaced Nexstar’s previous revolving loan commitment.

In July 2017, Nexstar amended its senior secured credit facility. The main provisions of the amendment included an additional $456.0 million in Term Loan A borrowings, issued at 99.16%, the proceeds of which were used to repay Nexstar’s outstanding Term Loan B with a principal balance of $454.4 million, a reduction in the applicable margin portion of interest rates by 50 basis points for Term Loan A, Term Loan B and revolving credit facility, and an extension of the maturity date of Nexstar’s Term Loan A and revolving credit facility to July 19, 2022.

As of December 31, 2017, Nexstar’s Term Loan B and Term Loan A, net of financing costs and discounts, had balances of $1.782 billion and $711.0 million, respectively. As of December 31, 2016, Nexstar’s Term Loan B and Term Loan A, net of financing costs and discounts, had balances of $252.7 million and $134.7 million, respectively. No amounts were outstanding under the revolving credit facility as of each of the years then ended.

Through December 2017, Nexstar prepaid a total of $235.0 million in principal balance under its Term Loan B, funded by cash on hand. In April 2017, Nexstar prepaid $25.0 million under its Term Loan A, funded by cash on hand. During the year ended December 31, 2017, Nexstar repaid scheduled maturities of $9.1 million of its term loans.

The refinancing of loans and prepayments of debt during 2017 resulted in loss on extinguishment of debt of $10.4 million, representing the write-off of unamortized debt financing costs and debt discounts.

Interest rates are selected at Nexstar’s option and the applicable margin is adjusted quarterly as defined in Nexstar’s amended credit agreement. The interest rate of Nexstar’s Term Loan A was 3.56% and 2.6% as of December 31, 2017 and 2016, respectively, and the interest rate of Nexstar’s Term Loan B was 4.06% and 3.75% as of December 31, 2017 and 2016, respectively. The interest rate on Nexstar’s revolving credit facility were 3.56% and 2.6% as of December 31, 2017 and 2016, respectively. Interest is payable periodically based on the type of interest rate selected. Additionally, Nexstar is required to pay quarterly commitment fees on the unused portion of its revolving loan commitment of 0.5% per annum.

Refer to Note 18 for subsequent events of Nexstar’s senior secured credit facility.

Mission Senior Secured Credit Facility

In January 2017, Mission borrowed a $232.0 million senior secured Term Loan B, issued at 99.50%, due January 17, 2024. The proceeds from this loan were primarily used to refinance Mission’s then existing Term Loan B with an outstanding principal balance of $225.9 million. In January 2017, Mission also issued a $3.0 million revolving loan commitment, maturing on January 17, 2022, of which no amount was drawn. This facility replaced Mission’s previous revolving loan commitment. The loan refinancing resulted in loss on extinguishment of debt of $2.1 million, representing the write-off of unamortized debt financing costs and debt discounts.

In July 2017, Mission amended its senior secured credit facilities. The main provisions of the amendment included a reduction in the applicable margin portion of interest rates by 50 basis points for Term Loan B and revolving credit facility, and an extension of the maturity date of Mission’s revolving credit facility to July 19, 2022.

As of December 31, 2017 and 2016, Mission’s Term Loan B, net of financing costs and discounts, had balances of $225.7 million and $223.8 million, respectively, and none outstanding under its revolving credit facility as of each of the years then ended.

During the year ended December 31, 2017, Mission repaid scheduled maturities of $1.2 million of its Term Loan B.

Terms of the Mission senior secured credit facility, including repayment, maturity and interest rates, are the same as the terms of the Nexstar senior secured facility described above. Interest rates are selected at Mission’s option and the applicable margin is adjusted quarterly as defined in Mission’s amended credit agreement. The interest rate of Mission’s Term Loan B was 4.06% and 3.75% as of December 31, 2017 and 2016, respectively. The interest rate on Mission’s revolving loans was 3.56% and 2.6% as of December 31, 2017 and 2016, respectively.

Marshall Senior Secured Credit Facility

In January 2017, Marshall borrowed a $51.3 million senior secured Term Loan A, issued at 99.25%, due June 28, 2018 and used all of its commitment under the revolving credit facility and borrowed $3.0 million, also due on June 28, 2018. The proceeds from these loans were primarily used to refinance Marshall’s then existing Term Loan A with an outstanding principal balance of $51.3 million and revolving loans with an outstanding principal balance of $2.0 million. The loan refinancing resulted in loss on extinguishment of debt of $0.2 million, representing the write-off of unamortized debt financing costs and debt discounts.

In July 2017, Marshall amended its senior secured credit facility which reduced the applicable margin portion of interest rates by 50 basis points for Term Loan A and outstanding revolving loans.

During the year ended December 31, 2017, Marshall repaid $1.3 million scheduled maturities of its Term Loan A.

Terms of the Marshall senior secured credit facility, except for the repayment and maturity, are the same as the terms of the Nexstar senior secured credit facility described above. Interest rates are selected at Marshall’s option and the applicable margin is adjusted quarterly as defined in Marshall’s amended credit agreement. The interest rate on Marshall’s Term Loan A and revolving credit facility was 3.56% and 2.6% as of December 31, 2017 and 2016, respectively.

As of December 31, 2017 and 2016, Marshall’s Term Loan A, net of financing costs and discounts, had balances of $49.6 million and $51.1 million, respectively, and $3.0 million and $2.0 million outstanding under its revolving credit facility as of each of the years then ended. As of December 31, 2017, all of Marshall’s outstanding debt are classified as current liabilities in the accompanying Consolidated Balance Sheet.

Shield Senior Secured Credit Facility

In connection with Nexstar’s merger with Media General, Nexstar consolidated Shield’s new senior secured credit facility with a Term Loan A principal balance of $24.8 million due January 17, 2022.

In July 2017, Shield amended its senior secured credit facility. The main provision of the amendments included a reduction in the applicable margin portion of interest rates by 50 basis points for Term Loan A and an extension of the loan’s maturity date to July 19, 2022.

During the year ended December 31, 2017, Shield repaid $0.6 million scheduled maturities of its Term Loan A.

Terms of the Shield senior secured credit facility, including repayment, maturity and interest rates, are the same as the terms of the Nexstar senior secured credit facility described above. Interest rates are selected at Shield’s option and the applicable margin is adjusted quarterly as defined in Shield’s amended credit agreement. The interest rate on Shield’s Term Loan A was 3.56% as of December 31, 2017.

As of December 31, 2017, Shield’s Term Loan A, net of financing costs and discounts, had a balance of $23.8 million.

Unused Commitments and Borrowing Availability

The Company had $172.0 million of total unused revolving loan commitments under the respective Nexstar, Mission and Marshall senior secured credit facilities, all of which was available for borrowing, based on the covenant calculations as of December 31, 2017. The Company’s ability to access funds under the senior secured credit facilities depends, in part, on its compliance with certain financial covenants. As of December 31, 2017, the Company was in compliance with its financial covenants.

On January 16, 2018, Nexstar borrowed $44.0 million revolving loans to partially fund its acquisition of LKQD (see Note 3).

On February 16, 2018, Nexstar repaid $20.0 million of the outstanding principal balance under its revolving credit facility, funded by cash on hand.

5.875% Notes

As part of Nexstar’s merger with Media General on January 17, 2017, Nexstar assumed the $400.0 million 5.875% Senior Notes due 2022 previously issued by LIN TV.

The 5.875% Notes will mature on November 15, 2022. Interest on the 5.875% Notes is payable semiannually in arrears on May 15 and November 15 of each year. The 5.875% Notes were issued pursuant to an Indenture, dated as of November 5, 2014 (the “5.875% Indenture”). The 5.875% Notes are senior unsecured obligations of Nexstar and certain of Nexstar’s future 100% owned subsidiaries, subject to certain customary release provisions.

The 5.875% Notes are senior obligations of Nexstar but junior to the secured debt, to the extent of the value of the assets securing such debt. The 5.875% Notes rank equal to the 5.625% Notes and the 6.125% Notes.

At any time on or after November 15, 2017, Nexstar may redeem the 5.875% Notes, in whole or in part, at the redemption prices set forth in the 5.875% Indenture. At any time before August 1, 2019, Nexstar may also redeem the 5.875% Notes at 105.875% of the aggregate principal amount at a redemption price, plus accrued and unpaid interest, if any, to the date of redemption, with the net cash proceeds from equity offerings, provided that (1) at least $200.0 million aggregate principal amount of 5.875% Notes issued under the 5.875% Indenture remains outstanding after each such redemption and (2) the redemption occurs within 90 days after the closing of the note offering.

Upon the occurrence of a change of control (as defined in the 5.875% Indenture), each holder of the 5.875% Notes may require Nexstar to repurchase all or a portion of the 5.875% Notes in cash at a price equal to 101.0% of the aggregate principal amount to be repurchased, plus accrued and unpaid interest, if any, thereon to the date of repurchase.

The 5.875% Indenture contains covenants that limit, among other things, Nexstar’s ability to (1) incur additional debt, (2) make certain restricted payments, (3) consummate specified asset sales, (4) enter into transactions with affiliates, (5) create liens, (6) pay dividends or make other distributions, (7) repurchase or redeem capital, (8) merge or consolidate with another person and (9) enter new lines of business.

The 5.875% Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the 5.875% Indenture, payment defaults or acceleration of other indebtedness, a failure to pay certain judgments, certain events of bankruptcy and insolvency and any guarantee of the 5.875% Notes that ceases to be in full force and effect with certain exceptions specified in the 5.875% Indenture. Generally, if an event of default occurs, the Trustee or holders of at least 25% in principal amount of the then outstanding notes may declare the principal of and accrued but unpaid interest, including additional interest, on all the notes to be due and payable.

5.625% Notes

On July 27, 2016, Nexstar Escrow Corporation, a wholly-owned subsidiary of Nexstar, completed the issuance and sale of $900.0 million of 5.625% Notes at par. The gross proceeds of the 5.625% Notes, plus Nexstar’s pre-funded interests, were deposited in a segregated escrow account which could not be utilized until certain conditions were satisfied. On January 17, 2017, Nexstar completed its merger with Media General. Thus, the proceeds of the 5.625% Notes plus the pre-funded interests deposited therein were released to Nexstar. The 5.625% Notes also became the senior unsecured obligations of Nexstar, guaranteed by Mission and certain of Nexstar’s and Mission’s future wholly-owned subsidiaries, subject to certain customary release conditions.

The 5.625% Notes will mature on August 1, 2024. Interest on the 5.625% Notes is payable semiannually in arrears on February 1 and August 1 of each year. The 5.625% Notes were issued pursuant to an Indenture, dated as of July 27, 2016 (the “5.625% Indenture”). The 5.625% Notes are senior unsecured obligations of Nexstar and are guaranteed by Mission and certain of Nexstar’s and Mission’s future 100% owned subsidiaries, subject to certain customary release provisions.

The 5.625% Notes are senior obligations of Nexstar and Mission but junior to the secured debt to the extent of the value of the assets securing such debt. The 5.625% Notes rank equal to the 5.875% Notes and the 6.125% senior unsecured notes due 2022 (“6.125% Notes”).

Nexstar has the option to redeem all or a portion of the 5.625% Notes at any time prior to August 1, 2019 at a price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date plus applicable premium as of the date of redemption. At any time on or after August 1, 2019, Nexstar may redeem the 5.625% Notes, in whole or in part, at the redemption prices set forth in the 5.625% Indenture. At any time prior to August 1, 2019, Nexstar may also redeem up to 40% of the aggregate principal amount at a redemption price of 105.625%, plus accrued and unpaid interest, if any, to the date of redemption, with the net cash proceeds from equity offerings.

Upon the occurrence of a change in control (as defined in the 5.625% Indenture), each holder of the 5.625% Notes may require Nexstar to repurchase all or a portion of the 5.625% Notes in cash at a price equal to 101.0% of the aggregate principal amount to be repurchased, plus accrued and unpaid interest, if any, thereon to the date of repurchase.

The 5.625% Indenture contains covenants that limit, among other things, Nexstar’s ability to (1) incur additional debt, (2) pay dividends or make other distributions or repurchases or redeem its capital stock, (3) make certain investments, (4) create liens, (5) merge or consolidate with another person or transfer or sell assets, (6) enter into restrictions affecting the ability of Nexstar’s restricted subsidiaries to make distributions, loans or advances to it or other restricted subsidiaries, (7) prepay, redeem or repurchase certain indebtedness and (8) engage in transactions with affiliates.

The 5.625% Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the Indenture, payment defaults or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% in principal amount of the then outstanding 5.625% Notes may declare the principal of and accrued but unpaid interest, including additional interest, on all the 5.625% Notes to be due and payable.

In 2016, Nexstar recorded $15.7 million in legal, professional and underwriting fees related to the issuance of the 5.625% Notes, which were recorded as debt finance costs and are being amortized over the term of the 5.625% Notes. Debt financing costs are netted against the carrying amount of the related debt.

6.125% Senior Unsecured Notes

On January 29, 2015, Nexstar completed the issuance and sale of $275.0 million 6.125% Notes at par.

The 6.125% Notes will mature on February 15, 2022. Interest on the 6.125% Notes is payable semiannually in arrears on February 15 and August 15 of each year commencing on August 15, 2015. The 6.125% Notes were issued pursuant to an Indenture, dated as of January 29, 2015 (the “6.125% Indenture”). The 6.125% Notes are senior unsecured obligations of Nexstar and are guaranteed by Mission and certain of Nexstar’s and Mission’s future 100% owned subsidiaries, subject to certain customary release provisions.

The 6.125% Notes are senior obligations of Nexstar and Mission but junior to the secured debt, including the Nexstar Facility, the Mission Facility and the Marshall Facility to the extent of the value of the assets securing such debt. The 6.125% Notes rank equal to the 6.875% Notes.

Nexstar has the option to redeem all or a portion of the 6.125% Notes at any time prior to February 15, 2018 at a price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date plus applicable premium as of the date of redemption. At any time on or after February 15, 2018, Nexstar may redeem the 6.125% Notes, in whole or in part, at the redemption prices set forth in the 6.125% Indenture. At any time before February 15, 2018, Nexstar may also redeem up to 40% of the aggregate principal amount at a redemption price of 106.125%, plus accrued and unpaid interest, if any, to the date of redemption, with the net cash proceeds from equity offerings.

Upon the occurrence of a change in control (as defined in the 6.125% Indenture), each holder of the 6.125% Notes may require Nexstar to repurchase all or a portion of the 6.125% Notes in cash at a price equal to 101.0% of the aggregate principal amount to be repurchased, plus accrued and unpaid interest, if any, thereon to the date of repurchase.

The 6.125% Indenture contains covenants that limit, among other things, Nexstar’s ability to (1) incur additional debt, (2) pay dividends or make other distributions or repurchases or redeem its capital stock, (3) make certain investments, (4) create liens, (5) merge or consolidate with another person or transfer or sell assets, (6) enter into restrictions affecting the ability of Nexstar’s restricted subsidiaries to make distributions, loans or advances to it or other restricted subsidiaries; prepay, redeem or repurchase certain indebtedness and (7) engage in transactions with affiliates.

The 6.125% Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the Indenture, payment defaults or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% in principal amount of the then outstanding 6.125% Notes may declare the principal of and accrued but unpaid interest, including additional interest, on all the 6.125% Notes to be due and payable.

In 2015, Nexstar recorded $3.0 million in legal, professional and underwriting fees related to the issuance of the 6.125% Notes, which were recorded as debt finance costs and amortized over the term of the 6.125% Notes. Debt financing costs are netted against the carrying amount of the related debt.

6.875% Senior Unsecured Notes

On November 9, 2012, Nexstar completed the issuance and sale of $250.0 million 6.875% Notes at par. On October 1, 2013, Nexstar completed the sale and issuance of $275.0 million 6.875% Notes at 100.25%, plus accrued interest from May 15, 2013. On February 27, 2017, Nexstar called the entire $525.0 million principal amount of its 6.875% Notes at a redemption price equal to 103.438% of the principal plus any accrued and unpaid interest, also funded by new borrowings described above. This transaction resulted in a loss on extinguishment of debt of $22.2 million, representing premiums paid to retire the notes and write-off of unamortized debt financing costs and debt premium.

Collateralization and Guarantees of Debt

The Company’s credit facilities described above are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses and the other assets of consolidated VIEs unavailable to creditors of Nexstar (See Note 2). Nexstar guarantees full payment of all obligations incurred under the Mission, Marshall and Shield senior secured credit facilities in the event of their default. Mission and Nexstar Digital, LLC, a wholly-owned subsidiary of Nexstar (“Nexstar Digital”), are guarantors of Nexstar’s senior secured credit facility. Mission is also a guarantor of Nexstar’s 6.125% Notes and the 5.625% Notes but does not guarantee Nexstar’s 5.875% Notes. Nexstar Digital does not guarantee any of the notes. Marshall and Shield are not guarantors of any debt within the group.

In consideration of Nexstar’s guarantee of the Mission senior secured credit facility, Mission has granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission station, subject to FCC consent. These option agreements (which expire on various dates between 2018 and 2027) are freely exercisable or assignable by Nexstar without consent or approval by Mission. The Company expects these option agreements to be renewed upon expiration.

Debt Covenants

The Nexstar credit agreement (senior secured credit facility) contains a covenant which requires Nexstar to comply with a maximum consolidated first lien net leverage ratio of 4.50 to 1.00. The financial covenant, which is formally calculated on a quarterly basis, is based on the combined results of the Company. The Mission, Marshall and Shield amended credit agreements do not contain financial covenant ratio requirements but do provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement. As of December 31, 2017, the Company was in compliance with its financial covenants.

Fair Value of Debt

The aggregate carrying amounts and estimated fair values of the Company’s debt were as follows, as of December 31 (in thousands):

	2017				2016
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Term loans⁽¹⁾	$	2,791,875	$	2,852,199	$	662,206	$	665,750
Revolving loans⁽¹⁾		3,000		2,985		2,000		1,969
6.875% Senior unsecured notes⁽²⁾		-		-		520,705		543,375
6.125% Senior unsecured notes⁽²⁾		273,008		284,625		272,598		284,625
5.875% Senior unsecured notes⁽²⁾		408,102		415,500		-		-
5.625% Senior unsecured notes⁽²⁾		886,475		925,875		884,512		893,250

(1)

The fair value of senior secured credit facilities is computed based on borrowing rates currently available to the Company for bank loans with similar terms and average maturities. These fair value measurements are considered Level 3, as significant inputs to the fair value calculation are unobservable in the market.

(2)

The fair value of Nexstar’s fixed rate debt is estimated based on bid prices obtained from an investment banking firm that regularly makes a market for these financial instruments. These fair value measurements are considered Level 2, as quoted market prices are available for low volume trading of these securities.

Debt Maturities

The scheduled maturities of the Company’s debt, excluding the unamortized discount and premium and certain debt financing costs, as of December 31, 2017 are summarized as follows (in thousands):

2018	$	92,807
2019		43,528
2020		61,663
2021		96,184
2022		1,224,536
Thereafter		2,908,704
	$	4,427,422