Gray Television, under the Gray Media banner, has made significant strides in reducing its debt. These transactions, completed following Wednesday's Closing Bell on Wall Street, have collectively led to a substantial reduction in the company's outstanding debt. Since October 1, the principal amount of debt has been decreased by $278 million, bringing the total reduction since the start of 2024 to $519 million. This achievement has allowed the Atlanta-headquartered company's Board of Directors to increase the previously announced debt repurchase authorization to a total of $250 million, providing additional liquidity for repurchasing outstanding indebtedness.

Anticipated Benefits of Debt Reduction

The company believes that the meaningful reduction in outstanding debt this year will result in a significant reduction of cash interest expense going forward. This is a crucial step in improving the company's financial health and enhancing its ability to invest in future growth opportunities. By lowering the debt burden, Gray Television can free up more cash flow, which can be used to fund operations, expand its business, or pursue strategic initiatives.

Through various recently completed transactions since November 8, Gray has used approximately $204 million of cash on hand to repurchase and retire approximately $239 million of principal amount of debt. These transactions have targeted specific debt instruments, including $5 million of outstanding principal of Term Loan D due December 1, 2028, $143 million of outstanding principal of 2027 Notes, $10 million of outstanding principal of 2030 Notes, and $81 million of outstanding principal of 2031 Notes. As a result, the company's outstanding debt structure has been significantly reshaped.

As of different dates, the principal amount outstanding of Gray Television's debt shows interesting trends. On December 31, 2023, the actual amounts were as follows: for the Revolving Credit Facility due 12/31/2027 ($680 million commitment), the amounts were not specified; for the 2021 Term Loan due 12/1/2028 (S + 300), it was $1,439 million; for the 2024 Term Loan due 6/4/2029 (S + 525), it was $499 million; for the 10.5% Senior Secured Notes due 7/15/2029, it was $1,250 million; for the Total outstanding principal secured by a first lien, it was $2,660 million; for the 5.875% Senior Unsecured Notes due 7/15/2026, it was $10 million; for the 7.000% Senior Unsecured Notes due 5/15/2027, it was $671 million; for the 4.750% Senior Unsecured Notes due 10/15/2030, it was $800 million; and for the 5.375% Senior Unsecured Notes due 11/15/2031, it was $1,300 million. On September 30, 2024, the actual amounts were $1,395 million for the 2021 Term Loan, $499 million for the 2024 Term Loan, and $1,250 million for the 10.5% Senior Secured Notes. On November 20, 2024, the amounts remained relatively stable.

Gray Television has emphasized that the extent of future repurchases, including the amount and timing of any repurchases, will depend on various factors such as general market conditions, regulatory requirements, alternative investment opportunities, and other considerations. The repurchase program supersedes any previous repurchase authorization and does not require the company to repurchase a minimum amount of debt. It can be modified, suspended, or terminated at any time without prior notice, providing the company with flexibility in managing its debt repayment strategy.