Media General reveals tranching on $960 million credit facility

By Sara Rosenberg

New York, July 8 - Media General Inc. came out with structural details on its $960 million credit facility that is getting ready to launch with a bank meeting on Wednesday, according to a market source.

The facility consists of a $60 million super-priority revolver (Ba1), a $35 million delayed-draw term loan A (B1) and an $865 million delayed-draw term loan B (B1), the source said.

RBC Capital Markets, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds will be used to refinance around $765 million of debt at Media General and New Young Broadcasting Holding Co. Inc. in connection with their merger and pay a $50 million cash contribution to Media General's qualified pension plan.

Subject to debt market conditions, Media General expects that its pro forma interest expense following the refinancing would be about $50 million per year.

Under the merger agreement, Media General will reclassify each outstanding share of its class A and class B common stock into one share of a newly created class of Media General common stock. Media General will then issue around 60.2 million shares of the new Media General common stock to Young's shareholders so the pro forma ownership split will be around 32.5% Media General shareholders and 67.5% Young shareholders.

On a pro forma basis, 2012 revenues for the combined company were $605 million, including about $115 million of political revenues.

Closing is expected late in the third or early in the fourth quarter, subject to Media General shareholder approval, Federal Communications Commission approval, clearance under the Hart-Scott-Rodino antitrust act and customary third-party consents.

Media General is a Richmond, Va.-based provider of news, information and entertainment. Young is a Nashville, Tenn.-based media company.

The combined company will operate under the Media General name and keep its headquarters in Richmond, Va.

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