Gannett Announces $1.045 Billion Debt Refinancing
01 February 2021 - 10:30PM
Business Wire
New Term Loan carries a significantly lower
interest rate and extends maturity to February 2026
Widely syndicated public financing provides the
Company with increased operational flexibility
2021 cash interest expense expected to be
approximately $90 million less than 2020
Company remains committed to continued debt and
leverage reduction
Gannett Co., Inc. ("Gannett", "we", "us", "our", or the
"Company") (NYSE: GCI) today announced that Gannett Holdings, LLC,
a wholly owned subsidiary of the Company, has priced a $1.045
billion term loan (“Term Loan B”), which will be used to refinance
the 11.5% term loan entered into for the acquisition of Gannett
Media Corp. The Term Loan B priced at L+700, with a 0.75% LIBOR
floor and maturity of February 2026, callable at any time. The new
Term Loan B is expected to close early next week and is subject to
execution of definitive documentation.
“We are pleased to announce the refinancing of our 11.5% term
loan with a widely syndicated L+700 Term Loan B, which meaningfully
improves the Company’s balance sheet and overall capital
structure,” said Michael Reed, Chairman and Chief Executive Officer
of Gannett. “The new Term Loan B will save us 375 basis points in
annual interest, which is expected to result in approximately $90
million in cash interest savings in 2021 before the benefit of our
expected asset sales further reducing debt. Refinancing our
original term loan was our number one priority since closing the
acquisition of Gannett Media Corp. in November 2019 and we are
thrilled to have been able to do so this early into 2021, which is
well ahead of our original target date. We will continue to make
reducing our outstanding debt a top priority, with a goal of
reaching first lien net leverage below 1.0x over the next two
years. On the back of our strong preliminary fourth quarter
results, we believe we are well positioned to organically grow our
cash flows in 2021 and remain confident that we will be able to
execute on $100-125 million in additional asset sales this
year.”
The Term Loan B was arranged by Citigroup Global Markets Inc.
and issued at a price of 98 with a maturity of 5 years, bringing
the yield-to-maturity to 8.65%. The loan will amortize quarterly at
a rate of 10% per annum beginning September 30, 2021. The loan is
subject to a financial maintenance covenant, which requires minimum
qualified cash of $30 million tested quarterly.
Additionally, the Company plans to issue, simultaneous with the
closing of the new term loan, $84 million of the existing 6% senior
secured convertible notes due in 2027 in order to refinance an
equivalent amount of notes that will be put to the Company in
connection with the refinancing. Therefore, the outstanding amount
of the existing 6% convertible notes is not expected to change.
Following these transactions, total debt outstanding will be $1.545
billion, which will include the $1.045 billion Term Loan B, $497.1
million 6% senior secured convertible notes, and $3.3 million of
legacy Gannett Media Corp. 4.75% senior secured convertible
notes.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally
focused media and marketing solutions company committed to the
communities in our network and helping them build relationships
with their local businesses. With an unmatched reach at the
national and local level, Gannett touches the lives of millions
with our Pulitzer-Prize winning content, consumer experiences and
benefits, and advertiser products and services. Its portfolio
includes the USA TODAY, local media organizations in 46 states in
the U.S. and Guam, and Newsquest, a wholly owned subsidiary with
over 140 local media brands operating in the United Kingdom.
Gannett also owns the digital marketing services companies
ReachLocal, Inc., UpCurve, Inc., and WordStream, Inc. and runs the
largest media-owned events business in the U.S., USA TODAY NETWORK
Ventures, formerly GateHouse Live. To connect with us, visit
www.gannett.com.
Cautionary Statement Regarding
Forward-Looking Statements
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding the expected terms of the Term
Loan B, the expected closing of the Term Loan B, potential interest
rate savings, our leverage target for the next two years, our
preliminary fourth quarter 2020 results, our ability to execute our
operational and integration plans, asset sales, our growth and cash
flow expectations and the refinancing of our 6% convertible notes.
These statements are based on management’s current expectations and
beliefs and are subject to a number of risks and uncertainties.
These and other risks and uncertainties could cause actual results
to differ materially from those described in the forward-looking
statements, many of which are beyond our control. The Company can
give no assurance its expectations will be attained. Accordingly,
you should not place undue reliance on any forward-looking
statements contained in this press release. For a discussion of
some of the risks and important factors that could cause actual
results to differ from such forward-looking statements, see the
risks and other factors detailed from time to time in the Company’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
other filings with the Securities and Exchange Commission.
Furthermore, new risks and uncertainties emerge from time to time,
and it is not possible for the Company to predict or assess the
impact of every factor that may cause its actual results to differ
from those contained in any forward-looking statements. Such
forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company’s
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210201005258/en/
For investor inquiries: Ashley Higgins Investor Relations
212-479-3160 investors@gannett.com
For media inquiries: Stephanie Tackach Director, Public
Relations 212-715-5490 stackach@gannett.com
New Gannett (NYSE:GCI)
Historical Stock Chart
From Apr 2024 to May 2024
New Gannett (NYSE:GCI)
Historical Stock Chart
From May 2023 to May 2024