Long-term Debt

As of

December

31,

2016

and

2015,

as applicable, long-term debt consisted of obligations under our

2014

Senior Credit Facility, our

7½%

senior notes due

2020

(the

“2020

Notes”), our

5.125%

senior notes due

2024

(the

“2024

Notes”) and our

5.875%

senior notes due

2026

(the

“2026

Notes”), as follows (in thousands):

	December 31,
	2016			2015
Long-term debt including current portion:
2014 Senior Credit Facility	$	556,438		$	556,438
2020 Notes		-			675,000
2024 Notes		525,000			-
2026 Notes		700,000			-
Total outstanding principal		1,781,438			1,231,438
Unamortized deferred loan costs - 2014 Senior Credit Facility		(12,158	)		(6,136	)
Unamortized deferred loan costs - 2020 Notes		-			(9,317	)
Unamortized deferred loan costs - 2024 Notes		(7,742	)		-
Unamortized deferred loan costs - 2026 Notes		(10,588	)		-
Unamortized premium - 2020 Notes		-			4,099
Unamortized premium - 2026 Notes		5,797			-
Net carrying value	$	1,756,747		$	1,220,084

Borrowing availability under the Revolving Credit Facility	$	60,000		$	50,000

February

2017,

Gray amended and restated the

2014

Senior Credit Facility (the

“2017

Senior Credit Facility”) to, among other things, reduce our interest rate under the term loan to LIBOR plus

2.50%,

increase our availability under the revolving credit facility from

$60.0

million to

$100.0

million, and extend the maturity of the revolving credit facility and term loan facility to

2022

and

2024,

respectively. See Note

“Subsequent Events” for more information on the

2017

Senior Credit Facility.

Prior to the entry in to the

2017

Senior Credit Facility, the

2014

Senior Credit Facility consisted of a revolving loan and a term loan. Excluding accrued interest, the amount outstanding under our

2014

Senior Credit Facility as of

December

31,

2016

and

2015

consisted solely of a term loan balance of

$556.4

million. As of

December

31,

2016

and

2015,

the interest rate on the balance outstanding under the

2014

Senior Credit Facility was

3.9%

and

3.8%,

respectively.

In connection with the consummation of the Schurz Acquisition and Related Transactions, effective

February

16,

2016,

we entered into the Second Amendment and Incremental Facility Agreement to our

2014

Senior Credit Facility (the “Second Amendment”). Pursuant to this Second Amendment, we borrowed

$425.0

million under the

2016

Term Loan to fund a portion of the purchase price of the Schurz Acquisition. The Second Amendment also increased our availability under the

2014

Senior Credit Facility by

$10.0

million to a total of

$60.0

million.

June

14,

2016,

we completed the private placement of

$500.0

million of our

2026

Notes (the “Original

2026

Notes”), at par. We used a portion of the proceeds of the Original

2026

Notes to repay the outstanding balance of the

2016

Term Loan, accrued interest thereon, and transaction related fees and expenses. On

September

14,

2016,

we completed the private placement of an additional

$200.0

million of our

2026

Notes (the “Additional

2026

Notes”). The Additional

2026

Notes were issued at a price of

103.0%,

resulting in aggregate gross proceeds of approximately

$206.0

million, plus accrued and unpaid interest from and including

June

14,

2016.

The Additional

2026

Notes are an additional issuance of, rank equally with and form a single series with the Original

2026

Notes. The

2026

Notes mature on

July

15,

2026.

Interest is payable semiannually, on

January

and

July

of each year.

Also on

September

14,

2016,

we completed the private placement of

$525.0

million of our

2024

Notes, at par. The

2024

Notes mature on

October

15,

2024.

Interest is payable semiannually, on

April

and

October

of each year, commencing on

April

15,

2017.

We used a portion of the proceeds from the sale of the

2026

Additional Notes and the

2024

Notes to complete the Tender Offer (discussed below). We used the remaining proceeds and cash on hand to redeem the

2020

Notes that remained outstanding after the completion of the Tender Offer.

As of

December

31,

2016,

we had

$700.0

million of

2026

Notes outstanding and

$525.0

million of

2024

Notes outstanding. The interest rate and yield on the Original

2026

Notes were each

5.875%.

The interest rate and yield on the Additional

2026

Notes were

5.875%

and

5.398%,

respectively. The interest rate and yield on the

2024

Notes were

5.125%.

September

2016,

we purchased approximately

$431.2

million in aggregate principal amount of the

2020

Notes validly

tendered

in connection with a previously announced cash

tender

offer (the “Tender Offer”).

Also in

September

2016,

and following the completion of the Tender Offer, we satisfied and discharged our obligations under the indenture governing the remaining

2020

Notes outstanding by depositing with the trustee thereunder the redemption price of

103.75%

of the principal amount thereunder, plus accrued and unpaid interest to, but not including, the date of redemption (the “Redemption”).

In connection with the completion of the Tender Offer and the Redemption, we recorded a loss from early extinguishment of debt of approximately

$32.0

million

($19.5

million net of tax) in year ended

December

31,

2016

consisting of Tender Offer premiums of

$18.2

million, redemption premiums of

$9.1

million, the write off of unamortized deferred financing costs of

$8.0

million and the payment of approximately

$0.2

million in legal and other professional fees; partially offset by the recognition of un-accreted net premium of

$3.5

million.

Collateral, Covenants and Restrictions

Our obligations under the

2017

Senior Credit Facility are secured by substantially all of the assets of Gray and substantially all of our subsidiaries, excluding real estate. In addition, substantially all of our subsidiaries are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the

2017

Senior Credit Facility. Gray Television, Inc. is a holding company with no material independent assets or operations. For all applicable periods, the

2026

Notes and

2024

Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by all of Gray Television, Inc.'s subsidiaries. As of

December

31,

2016,

there were no significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to the guarantor subsidiaries.

The

2017

Senior Credit Facility contains affirmative and restrictive covenants with which we must comply, including: (a) limitations on additional indebtedness; (b) limitations on liens; (c) limitations on the sale of assets; (d) limitations on guarantees; (e) limitations on investments and acquisitions; (f) limitations on the payment of dividends and share repurchases; (g) limitations on mergers; and (h) maintenance of a

first

lien leverage ratio not to exceed certain maximum limits while any amount is outstanding under the revolving credit facility, as well as other customary covenants for credit facilities of this type. The

2026

Notes and

2024

Notes include covenants with which we must comply which are typical for borrowing transactions of their nature. As of

December

31,

2016

and

2015,

we were in compliance with all required covenants under all our debt obligations.

may

redeem some or all of the

2026

Notes at any time after

July

15,

2021

at specified redemption prices. We

may

also redeem up to

35%

of the aggregate principal amount of the

2026

Notes using the proceeds from certain equity offerings completed before

July

15,

2019.

In addition, we

may

redeem some or all of the

2026

Notes at any time prior to

July

15,

2021

at a price equal to

100%

of the principal amount thereof plus a make whole premium, and accrued but unpaid interest. If we sell certain of our assets or experience specific kinds of changes of control, we must offer to repurchase the

2026

Notes.

may

redeem some or all of the

2024

Notes at any time after

October

15,

2019

at specified redemption prices. We

may

also redeem up to

35%

of the aggregate principal amount of the

2024

Notes using the proceeds from certain equity offerings completed before

October

15,

2019.

In addition, we

may

redeem some or all of the

2024

Notes at any time prior to

October

15,

2019

at a price equal to

100%

of the principal amount thereof plus a make whole premium, and accrued and unpaid interest. If we sell certain of our assets or experience specific kinds of changes of control, we must offer to repurchase the

2024

Notes.

Maturities

Aggregate minimum principal maturities on long-term debt as of

December

31,

2016

were as follows (in thousands):

	Minimum Principal Maturities
	2014 Senior		2024		2026
Year	Credit Facility (1)		Notes		Notes		Total
2017	$	-	$	-	$	-	$	-
2018		-		-		-		-
2019		-		-		-		-
2020		-		-		-		-
2021		556,438		-		-		556,438
Thereafter		-		525,000		700,000		1,225,000
Total	$	556,438	$	525,000	$	700,000	$	1,781,438

(1)

Pursuant to the

2017

Senior Credit Facility, the maturity date of the term loan was extended to

February

2024.

Interest Payments

For all of our interest bearing obligations, we made interest payments of approximately

$76.2

million,

$76.9

million and

$61.9

million during

2016,

2015

and

2014,

respectively. We did

not

capitalize any interest payments during the years ended

December

31,

2016,

2015

2014.