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Note 3 - Long-term Debt | 6 Months Ended
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Jun. 30, 2017
Notes to Financial Statements |
Debt Disclosure [Text Block] |
3. | Long-term Debt
As of June 30, 2017 and December 31, 2016, long-term debt primarily consisted of obligations under our 2017 Senior Credit Facility (as defined below), our 2014 Senior Credit Facility (as defined below), our 5.125% Senior Notes due 2024 (the “2024 Notes”) and our 5.875% Senior Notes due 2026 (the “2026 Notes”), as follows (in thousands):
|  | June 30, |  |  | December 31, |
|  | 2017 |  |  | 2016 |
Long-term debt including current portion: |  |  |  |  |  |  |  |
2014 Senior Credit Facility |  | $ | - |  |  | $ | 556,438 |
2017 Senior Credit Facility |  |  | 638,443 |  |  |  | - |
2024 Notes |  |  | 525,000 |  |  |  | 525,000 |
2026 Notes |  |  | 700,000 |  |  |  | 700,000 |
Total outstanding principal |  |  | 1,863,443 |  |  |  | 1,781,438 |
Unamortized deferred loan costs - 2014 Senior Credit Facility |  |  | - |  |  |  | (12,158 | )
Unamortized deferred loan costs - 2017 Senior Credit Facility |  |  | (13,047 | ) |  |  | - |
Unamortized deferred loan costs - 2024 Notes |  |  | (7,243 | ) |  |  | (7,742 | )
Unamortized deferred loan costs - 2026 Notes |  |  | (10,031 | ) |  |  | (10,588 | )
Unamortized premium - 2026 Notes |  |  | 5,492 |  |  |  | 5,797 |
Less current portion |  |  | (6,417 | ) |  |  | - |
Net carrying value |  | $ | 1,832,197 |  |  | $ | 1,756,747 |
Borrowing availability under the Revolving Credit Facility |  | $ | 100,000 |  |  | $ | 60,000 |
On February 7, 2017, we entered into a Third Amended and Restated Credit Agreement (the “2017 Senior Credit Facility”), consisting of a $556.4 million term loan facility (the “2017 Initial Term Loan”) and a $100.0 million revolving credit facility (the “2017 Revolving Credit Facility”). Amounts outstanding under the 2017 Initial Term Loan were used to repay amounts outstanding under our prior credit agreement (the “2014 Senior Credit Facility”). On April 3, 2017, we borrowed $85.0 million under an incremental term loan (the “2017 Incremental Term Loan” and, together with the 2017 Initial Term Loan, the “2017 Term Loan”) under the 2017 Senior Credit Facility to fund the Diversified Acquisition. As of June 30, 2017, the 2017 Senior Credit Facility provided total commitments of $738.4 million, consisting of the $638.4 million 2017 Term Loan and the $100.0 million 2017 Revolving Credit Facility. Our quarterly principal payments under the 2017 Term Loan are $1.6 million. Prior to the entry into the 2017 Senior Credit Facility, the 2014 Senior Credit Facility consisted of a revolving loan and a term loan. Excluding accrued interest, the amount outstanding under our 2014 Senior Credit Facility as of December 31, 2016 consisted solely of a term loan balance of $556.4 million. As of December 31, 2016, the interest rate on the balances outstanding under the 2014 Senior Credit Facility were 3.9%. The 2017 Term Loan borrowings bear interest, at our option, at either the London Interbank Offered Rate (“LIBOR”) or the Base Rate (as defined below), in each case, plus an applicable margin. Until our results of operations for the quarter ending September 30, 2017 have been certified, the applicable margin is 2.50% for all LIBOR borrowings and 1.50% for all Base Rate borrowings (the “Initial Applicable Margin”). Thereafter, (i) if the leverage ratio as set forth in the 2017 Senior Credit Facility (the “Leverage Ratio”) is less than or equal to 5.25 to 1.00, the applicable margin will be 2.25% for all LIBOR borrowings and 1.25% for all Base Rate borrowings and (ii) if the Leverage Ratio is greater than 5.25 to 1.00, the Initial Applicable Margin will apply. As of June 30, 2017, the interest rate on balance outstanding under the 2017 Term Loan was 3.6%. Borrowings under the 2017 Revolving Credit Facility bear interest, at our option, based on LIBOR plus 1.50% to 2.00% or the Base Rate plus 0.50% to 1.00%, in each case based on a first lien leverage ratio test as set forth in the 2017 Senior Credit Facility (the “First Lien Leverage Ratio”). Base Rate is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus 0.50% and (iii) LIBOR plus 1.00%. We are required to pay a commitment fee on the average daily unused portion of the 2017 Revolving Credit Facility, which rate may range from 0.375% to 0.50% on an annual basis, based on the First Lien Leverage Ratio. The 2017 Revolving Credit Facility matures on February 7, 2022, and the 2017 Term Loan matures on February 7, 2024. As a result of entering into the 2017 Senior Credit Facility, we recorded a loss on extinguishment of debt of approximately $2.9 million in the six -months ended June 30, 2017, and we incurred approximately $5.0 million in deferred financing costs that will be amortized over the life of the 2017 Senior Credit Facility. As of June 30, 2017 and December 31, 2016, we had $525.0 million of 2024 Notes outstanding. The interest rate and yield on the 2024 Notes were 5.125%. The 2024 Notes mature on October 15, 2024. Interest is payable semiannually, on April 15 and October 15 of each year. On June 14, 2016, we completed the private placement of $500.0 million of our 2026 Notes (the “Original 2026 Notes”), at par. On September 14, 2016, we completed the private placement of an additional $200.0 million of our 2026 Notes (the “Additional 2026 Notes”). The Additional 2026 Notes were issued at a price of 103.0%, resulting in aggregate gross proceeds of approximately $206.0 million, plus accrued and unpaid interest from and including June 14, 2016. As of June 30, 2017 and December 31, 2016, we had $700.0 million of 2026 Notes outstanding. The interest rate and yield on the Original 2026 Notes were each 5.875%. The interest rate and yield on the Additional 2026 Notes were 5.875% and 5.398%, respectively. The Additional 2026 Notes are an additional issuance of, rank equally with and form a single series with the Original 2026 Notes. The 2026 Notes mature on July 15, 2026. Interest is payable semiannually, on January 15 and July 15 of each year. Collateral, Covenants and Restrictions Our obligations under the 2017 Senior Credit Facility are secured by substantially all of our and our consolidated subsidiaries' assets, excluding real estate. In addition, substantially all of our subsidiaries are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the 2017 Senior Credit Facility. Gray Television, Inc. is a holding company with no material independent assets or operations. For all applicable periods, the 2024 Notes and 2026 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of Gray Television, Inc.'s subsidiaries. Any subsidiaries of Gray Television, Inc. that do not gurantee the 2024 Notes and 2026 Notes are minor. As of June 30, 2017, there were no significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to the guarantor subsidaries. The 2017 Senior Credit Facility contains affirmative and restrictive covenants with which we must comply, including: (a) limitations on additional indebtedness; (b) limitations on liens; (c) limitations on the sale of assets; (d) limitations on guarantees; (e) limitations on investments and acquisitions; (f) limitations on the payment of dividends and share repurchases; (g) limitations on mergers; and (h) maintenance of a first lien leverage ratio not to exceed certain maximum limits while any amount is outstanding under the revolving credit facility, as well as other customary covenants for credit facilities of this type. The 2026 Notes and 2024 Notes include covenants with which we must comply which are typical for borrowing transactions of their nature. As of June 30, 2017 and December 31, 2016, we were in compliance with all required covenants under all our debt obligations. Maturities Aggregate minimum principal maturities on long-term debt as of June 30, 2017 were as follows (in thousands):
|  | Minimum Principal Maturities |
Year |  | 2017 Senior Credit Facility |  |  | 2024 Notes |  |  | 2026 Notes |  |  | Total |
2017 |  | $ | 3,208 |  |  | $ | - |  |  | $ | - |  |  | $ | 3,208 |
2018 |  |  | 6,417 |  |  |  | - |  |  |  | - |  |  |  | 6,417 |
2019 |  |  | 6,417 |  |  |  | - |  |  |  | - |  |  |  | 6,417 |
2020 |  |  | 6,417 |  |  |  | - |  |  |  | - |  |  |  | 6,417 |
2021 |  |  | 6,417 |  |  |  | - |  |  |  | - |  |  |  | 6,417 |
Thereafter |  |  | 609,567 |  |  |  | 525,000 |  |  |  | 700,000 |  |  |  | 1,834,567 |
Total |  | $ | 638,443 |  |  | $ | 525,000 |  |  | $ | 700,000 |  |  | $ | 1,863,443 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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