Long-term Debt

As of

March

31,

2017

and

December

31,

2016,

ong-term debt primarily consisted of obligations under our

2017

Senior Credit Facility (as defined below), our

2014

Senior Credit Facility (as defined below), 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):

	March 31,			December 31,
	2017			2016
Long-term debt including current portion:
2014 Senior Credit Facility	$	-		$	556,438
2017 Senior Credit Facility		555,046			-
2024 Notes		525,000			525,000
2026 Notes		700,000			700,000
Total outstanding principal		1,780,046			1,781,438
Unamortized deferred loan costs - 2014 Senior Credit Facility		-			(12,158	)
Unamortized deferred loan costs - 2017 Senior Credit Facility		(13,609	)		-
Unamortized deferred loan costs - 2024 Notes		(7,493	)		(7,742	)
Unamortized deferred loan costs - 2026 Notes		(10,308	)		(10,588	)
Unamortized premium - 2026 Notes		5,644			5,797
Less current portion		(5,564	)		-
Net carrying value	$	1,748,716		$	1,756,747

Borrowing availability under Revolving Credit Facility	$	100,000		$	60,000

February

2017,

we entered into a Third Amended and Restated Credit Agreement (the

“2017

Senior Credit Facility”). As of

March

31,

2017,

the

2017

Senior Credit Facility provided total commitments of

$655.0

million, consisting of a

$555.0

million term loan facility (the

“2017

Initial Term Loan”) and a

$100.0

million revolving credit facility (the

“2017

Revolving Credit Facility”). Amounts outstanding under the

2017

Term Loan were used to repay amounts outstanding under our prior credit agreement (the

“2014

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

consisted solely of a term loan balance of

$556.4

million. As of

December

31,

2016,

the interest rate on the balance outstanding under the

2014

Senior Credit Facility was

3.9%.

The

2017

Initial Term Loan borrowings bear interest, at our option, at either the London Interbank Offered Rate (“LIBOR”) or the Base Rate (as defined below), in each case, plus an applicable margin. Until our results of operations for the quarter ending

September

30,

2017

have been certified, the applicable margin is

2.50%

for all LIBOR borrowings and

1.50%

for all Base Rate borrowings (the “Initial Applicable Margin”). Thereafter, (i) if the leverage ratio as set forth in the

2017

Senior Credit Facility (the “Leverage Ratio”) is less than or equal to

5.25

1.00,

the applicable margin will be

2.25%

for all LIBOR borrowings and

1.25%

for all Base Rate borrowings and (ii) if the Leverage Ratio is greater than

5.25

1.00,

the Initial Applicable Margin will apply. As of

March

31,

2017,

the interest rate on balance outstanding under the

2017

Senior Credit Facility was

3.3%.

The

2017

Initial Term Loan also requires us to make quarterly principal payments of

$1.4

million.

Borrowings under the

2017

Revolving Credit Facility bear interest, at our option, based on LIBOR plus

1.50%

2.00%

or the Base Rate plus

0.50%

1.00%,

in each case based on a

first

lien leverage ratio test as set forth in the

2017

Senior Credit Facility (the “First Lien Leverage Ratio”). Base Rate is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus

0.50%

and (iii) LIBOR plus

1.00%.

We are required to pay a commitment fee on the average daily unused portion of the

2017

Revolving Credit Facility, which rate

may

range from

0.375%

0.50%

on an annual basis, based on the First Lien Leverage Ratio.

The

2017

Revolving Credit Facility matures on

February

2022,

and the

2017

Initial Term Loan matures on

February

2024.

As a result of entering into the

2017

Senior Credit Facility, we recorded a loss on extinguishment of debt of

approximately

$2.5

million in the

first

quarter of

2017,

and we incurred approximately

$4.6

million in deferred financing costs that will be amortized over the life of the

2017

Senior Credit Facility.

Subsequent to

March

31,

2017,

we entered into an amendment and incremental facility agreement to the

2017

Senior Credit Facility (the

“2017

Incremental Term Loan” and, together with the

2017

Initial Term Loan, the

“2017

Term Loan”). For additional information on the

2017

Incremental Term Loan, See Note

“Subsequent Events.”

As of

March

31,

2017

and

December

31,

2016,

we had

$525.0

million of

2024

Notes outstanding.

The interest rate and yield on the

2024

Notes were

5.125%.

The

2024

Notes mature on

October

15,

2024.

Interest is payable semiannually, on

April

and

October

of each year, commencing on

April

15,

2017.

June

14,

2016,

we completed the private placement of

$500.0

million of our

2026

Notes (the “Original

2026

Notes”), at par. 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.

As of

March

31,

2017

and

December

31,

2016,

we had

$700.0

million of

2026

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 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.

Collateral, Covenants and Restrictions

Our obligations under the

2017

Senior Credit Facility are secured by substantially all of our and our consolidated subsidiaries' assets, 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. GME is not a guarantor of, and its assets are not pledged to secure 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

2024

Notes and

2026

Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by all of Gray Television, Inc.'s subsidiaries. GME is not a guarantor of the

2024

Notes or the

2026

Notes. As of

March

31,

2017,

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

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

March

31,

2017

and

December

31,

2016,

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

Maturities

Aggregate minimum principal maturities on long-term debt as of

March

31,

2017

were as follows (in thousands):

	Minimum Principal Maturities
Year	2017 Senior Credit Facility (1)		2024 Notes		2026 Notes		Total
2017	$	4,173	$	-	$	-	$	4,173
2018		5,564		-		-		5,564
2019		5,564		-		-		5,564
2020		5,564		-		-		5,564
2021		5,564		-		-		5,564
Thereafter		528,617		525,000		700,000		1,753,617
Total	$	555,046	$	525,000	$	700,000	$	1,780,046

(1)

April

2017,

we borrowed

$85.0

million under the terms of the

2017

Incremental Term Loan. Accordingly the balance outstanding under the

2017

Senior Credit Facility increased to

$640.0

million and the quarterly principal payments will increase to

$1.6

million beginning on

June

30,

2017.

Interest Payments

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

$29.9

million and

$7.7

million during the

three

-month periods ended

March

31,

2017

and

2016,

respectively. We did not capitalize any interest payments during the

three

-month periods ended

March

31,

2017

2016.