Gannett is seeking to refinance its existing term loan under its senior secured credit facilities. The company intends to issue senior secured notes to refinance a portion of the term loan and refinance the remainder of the existing term loan with a new senior secured term loan. The proposed refinancing transactions are subject to market and other conditions.
The new senior secured term loan would be in a principal amount of up to $550 million. Gannett Holdings, a Delaware limited liability company and a wholly-owned subsidiary of the company, would be the borrower under the credit agreement and the lenders are anticipated to include funds managed by affiliates of Apollo Capital Management. Upon closing, Gannett would use the net proceeds of the loans to refinance a portion of its existing term loan.
Loans under the credit agreement are expected to bear interest at a per annum rate equal to LIBOR plus a margin of 5% with a floor of 50 basis points. All obligations under the credit agreement will be secured by all or substantially all of the assets of Gannett and the direct and indirect material domestic subsidiaries of the company. The obligations of the borrower under the credit agreement are guaranteed on a senior secured basis by the company and the guarantor subsidiaries. The completion of the credit agreement is contingent upon the successful offering of senior secured notes.
During Q3/21, Gannett has repaid approximately $65 million in principal under its existing five-year term loan using the proceeds from $38.6 million of real estate and other asset sales and excess cash, bringing the five-year term loan principal down to $925.7 million. The company is scheduled to make the first amortization payment of $26.1 million on Sept. 30 and expects to end the quarter with the five-year term loan principal under $900 million and with approximately $130 million of cash and cash equivalents.