Media General lifts term B-2 to $825 million, revises OID to 98¾

By Sara Rosenberg

New York, Oct. 31 – Media General Inc. upsized its term loan B-2 due July 2020 to $825 million from $325 million and tightened the original issue discount to 98¾ from 98½, according to a market source.

Also, the maximum total net leverage covenant was removed, making the term loan B-2 covenant-light, the source said. The company’s existing term loan B will maintain its maximum total net leverage covenant.

Pricing on the term loan B-2 remained at Libor plus 325 basis points with a 1% Libor floor, and there is still 101 soft call protection for six months.

With the term loan B-2 upsizing and an increase to the company’s bond offering to $400 million from $300 million, the company eliminated plans for a $600 million five-year term loan A that was talked at Libor plus 250 bps with a 50 bps upfront fee, the source continued.

Recommitments for the term loan B-2 were due at 3 p.m. ET on Friday, the source added.

The company is also planning a $90 million revolver.

RBC Capital Markets LLC, Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc., U.S. Bank NA and Capital One are the joint lead arrangers on the deal.

Proceeds will be used to support the company’s merger with LIN Media LLC.

Under the agreement, shareholders of LIN Media will receive $25.97 in cash or 1.4714 shares of the new holding company, subject to proration. The maximum cash amount that will be paid to the LIN Media shareholders is $763 million. Media General shareholders will receive one share of the new holding company for each share of Media General that they own upon closing.

The new debt will fund the cash payment to LIN shareholders and refinance certain LIN debt.

Secured leverage is 3.6 times, down from 3.8 times under the original structure, and total leverage is 5 times.

Closing is subject to customary closing conditions, including the approval of the Federal Communications Commission, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and certain third-party consents.

Media General is a Richmond, Va.-based local television broadcasting and digital media company. LIN Media is an Austin, Texas-based local multimedia company.

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