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Note 4 - Long-term Debt | 9 Months Ended
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Sep. 30, 2019
Notes to Financial Statements |
Debt Disclosure [Text Block] | 4. Long-term Debt As of September 30, 2019, long-term debt primarily consisted of obligations under our 2019 Senior Credit Facility (as defined below), our 5.125% Senior Notes due 2024 (the “2024 Notes”), our 5.875% senior notes due 2026 (the “2026 Notes”) and our 7.0% senior notes due 2027 (the “2027 Notes”). As of December 31, 2018, long-term debt primarily consisted of obligations under our 2017 Senior Credit Facility (as defined below), our 2024 Notes, our 2026 Notes and our 2027 Notes as follows (in millions):
|  | September 30, |  |  | December 31, |
|  | 2019 |  |  | 2018 |
Long-term debt including current portion: |  |  |  |  |  |  |  |
2017 Term Loan |  | $ | 595 |  |  | $ | 595 |
2019 Term Loan |  |  | 1,390 |  |  |  | - |
2024 Notes |  |  | 525 |  |  |  | 525 |
2026 Notes |  |  | 700 |  |  |  | 700 |
2027 Notes |  |  | 750 |  |  |  | 750 |
Total outstanding principal |  |  | 3,960 |  |  |  | 2,570 |
Unamortized deferred loan costs - 2017 Term Loan |  |  | - |  |  |  | (9 | )
Unamortized deferred loan costs - 2019 Term Loan |  |  | (45 | ) |  |  | - |
Unamortized deferred loan costs - 2024 Notes |  |  | (5 | ) |  |  | (6 | )
Unamortized deferred loan costs - 2026 Notes |  |  | (8 | ) |  |  | (8 | )
Unamortized deferred loan costs - 2027 Notes |  |  | (11 | ) |  |  | (2 | )
Unamortized premium - 2026 Notes |  |  | 4 |  |  |  | 4 |
Long-term debt, less deferred financing costs |  |  | 3,895 |  |  |  | 2,549 |
Less current portion |  |  | (14 | ) |  |  | - |
Net carrying value |  | $ | 3,881 |  |  | $ | 2,549 |
Borrowing availability under Revolving Credit Facility |  | $ | 200 |  |  | $ | 100 |
In connection with the Raycom Merger, on January 2, 2019, we amended our senior credit facility (the “2017 Credit Facility” and, as amended, the “2019 Senior Credit Facility”) as follows: (1) we replaced our existing $100 million revolving credit facility under our prior senior credit facility with a new five year revolving credit facility (the “2019 Revolving Credit Facility”), the terms of which provide for up to $200 million in available borrowings and a maturity date of January 2, 2024, and (2) we incurred a $1.4 billion term loan (the “2019 Term Loan”), which matures on January 2, 2026 and (3) assumed the outstanding $556.4 million term loan facility (the “2017 Initial Term Loan”) and $85 million incremental term loan (the “2017 Incremental Term Loan” and, together with the 2017 Initial Term Loan, the “2017 Term Loan”) which mature on February 7, 2024. Since the Raycom Merger was not completed by December 15, 2018, we incurred a ticking fee of $0.8 million at a rate of 1.25% of the 2019 Term Loan amount, from December 16, 2018 to January 2, 2019. In addition, we assumed $750 million of the 2027 Notes, which were issued by our special purpose, wholly-owned subsidiary on November 16, 2018. The proceeds of the 2019 Term Loan and the 2027 Notes were used to fund a portion of the cash consideration payable in the Raycom Merger. Borrowings under the 2019 Term Loan bear interest, at our option, at either the London Interbank Offered Rate (“LIBOR”) or the Base Rate, in each case, plus an applicable margin of 2.5% for LIBOR borrowings and 1.5% for Base Rate borrowings. As of September 30, 2019, the interest rate on the balance outstanding under the 2019 Term Loan was 4.8%. The 2019 Term Loan matures on January 2, 2026. Borrowings under the 2017 Term Loan bear interest, at our option, at either the LIBOR or the Base Rate (as defined below), in each case, plus an applicable margin. Currently, the applicable margin is 2.25% for LIBOR borrowings and 1.25% for Base Rate borrowings. The applicable margin is determined quarterly based on our leverage ratio as set forth in the 2019 Senior Credit Facility (the “Leverage Ratio”). If our Leverage Ratio is less than or equal to 5.25 to 1.00, the applicable margin is 2.25% for all LIBOR borrowings and 1.25% for all Base Rate borrowings, and if the Leverage Ratio is greater than 5.25 to 1.00, the applicable margin is 2.5% for all LIBOR borrowings and 1.5% for all Base Rate borrowings. As of September 30, 2019, the interest rate on the balance outstanding under the 2017 Term Loan was 4.6%. The 2017 Term Loan matures on February 7, 2024. Borrowings under the 2019 Revolving Credit Facility currently bear interest, at our option, at either LIBOR plus the applicable margin or Base Rate plus the applicable margin, in each case based on a first lien leverage ratio test as set forth in the 2019 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% or (iii) LIBOR plus 1.50%. We are required to pay a commitment fee on the average daily unused portion of the 2019 Revolving Credit Facility, which may range from 0.375% to 0.50% on an annual basis, based on the First Lien Leverage Ratio. The 2019 Revolving Credit Facility matures on January 2, 2024. We incurred $42.5 million of transaction fees and expenses related to the 2019 Senior Credit Facility. At September 30, 2019 these were recorded as a reduction of the balance of the outstanding debt and are amortized over the life of the 2019 Senior Credit Facility. The amortization of these fees is included in our interest expense. As of September 30, 2019, the aggregate minimum principal maturities of our long term debt for the remainder of 2019 and the succeeding 5 years were as follows (in millions):
|  | Minimum Principal Maturities |
Year |  | 2019 Senior Credit Facility |  |  | 2024 Notes |  |  | 2026 Notes |  |  | 2027 Notes |  |  | Total |
Remainder of 2019 |  | $ | 4 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 4 |
2020 |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |
2021 |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |
2022 |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |
2023 |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |
2024 |  |  | 609 |  |  |  | 525 |  |  |  | - |  |  |  | - |  |  |  | 1,134 |
Thereafter |  |  | 1,316 |  |  |  | - |  |  |  | 700 |  |  |  | 750 |  |  |  | 2,766 |
Total |  | $ | 1,985 |  |  | $ | 525 |  |  | $ | 700 |  |  | $ | 750 |  |  | $ | 3,960 |
Our obligations under the 2019 Senior Credit Facility are secured by substantially all of our consolidated 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 2019 Senior Credit Facility. Gray Television, Inc. is a holding company, and has no material independent assets or operations. For all applicable periods, the 2024 Notes, 2026 Notes and 2027 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 guarantee the 2024 Notes, 2026 Notes and 2027 Notes are minor. As of September 30, 2019, there were no significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to the guarantor subsidiaries. The 2019 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 the First Lien Leverage Ratio while any amount is outstanding under the revolving credit facility, as well as other customary covenants for credit facilities of this type. The 2024 Notes, the 2026 Notes and the 2027 Notes include covenants with which we must comply which are typical for borrowing transactions of their nature. As of September 30, 2019 and December 31, 2018, we were in compliance with all required covenants under all our debt obligations. For all our interest bearing obligations, we made interest payments of approximately $134 million and $74 million during the nine-months ended September 30, 2019 and 2018, respectively. We did not capitalize any interest payments during the nine-months ended September 30, 2019 and 2018.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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