NOTES PAYABLE AND COMMERCIAL BANK FINANCING

6 Months Ended

Jun. 30, 2014

NOTES PAYABLE AND COMMERCIAL BANK FINANCING

NOTES PAYABLE AND COMMERCIAL BANK FINANCING

4. NOTES PAYABLE AND COMMERCIAL BANK FINANCING

On July 23, 2014, we issued $550.0 million in senior unsecured notes, which bear interest at a rate of 5.625% per annum and mature on August 1, 2024 (the 5.625% Notes), pursuant to an indenture dated July 23, 2014 (the 5.625% Indenture).  The 5.625% Notes were priced at 100% of their par value and interest is payable semi-annually on February 1 and August 1, commencing on February 1, 2015.  Prior to August 1, 2019, we may redeem the 5.625% Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the 5.625% Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium as set forth in the 5.625% Indenture.  In addition, on or prior to August 1, 2019, we may redeem up to 35% of the 5.625% Notes, using proceeds of certain equity offerings.  If we sell certain of our assets or experience specific kinds of changes of control, the holders of the 5.625% Notes may require us to repurchase some or all of the notes.  The proceeds from the offering of the 5.625% Notes, together with borrowings under our Bank Credit Agreement and cash on hand, were used to finance the acquisition of the Allbritton companies on July 1, 2014.  Concurrent with entering into the 5.625% Indenture in July 2013, we also entered into a registrations rights agreement requiring us to file a registration statement covering an offer to exchange of the 5.625% Notes for registered securities with the Securities and Exchange Commission (the SEC) to be effective by April 19, 2015.

On July 31, 2014, we entered into an amendment and restatement (the Amendment) of our bank credit agreement (as amended, the Bank Credit Agreement).  Pursuant to the Amendment, we raised $400.0 million of incremental term loan B commitments.  The incremental term loan matures in July 2021.  The term loan was issued at 99.75% of par and bears interest at LIBOR plus 2.75% with a 0.75% LIBOR floor.  The proceeds, together with the 5.625% Notes and cash on hand were used to finance the acquisition of the Allbritton companies on July 31, 2014.  Additionally, in connection with the Amendment, $327.7 million of term loan A, including $72.5 million of the remaining $108.2 million delayed draw term loan A commitments, were converted into revolving commitments.  As of closing, we have $361.2 million of committed term loan A, which consists of $325.5 million currently outstanding and $35.7 million under the delayed draw to be borrowed on or before December 31, 2014, and we have $485.2 million in revolving commitments.  We also amended certain terms of the Bank Credit Agreement, including increased flexibility in dispositions related to requirements of regulatory authorities, an increase in the non-TV/Radio acquisition capacity, the elimination of certain maintenance financial covenants, an increase to the first lien indebtedness maintenance test, and increased flexibility under certain restrictive covenants.

We expect to incur $14.6 million in financing costs related to the issuance of the 5.625% Notes and the Amendment, which we expect to capitalize as deferred financing costs.