Gannett Announces $1.045 Billion Debt Refinancing

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.
https://investors.gannett.com/news/news-details/2021/Gannett-Announces-1.045-Billion-Debt-Refinancing/default.aspx

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