01/14/2025 | Press release | Distributed by Public on 01/14/2025 06:38
BALTIMORE - Sinclair, Inc. (Nasdaq: SBGI), the "Company" or "Sinclair," today announced that Sinclair Television Group, Inc. ("STG") and certain affiliated entities have entered into a Transaction Support Agreement (including the attached term sheet and other attachments thereto, the "TSA") with certain of STG's secured creditors (the "Consenting Creditors"), including lenders holding term loans (the "Existing Term Loan Facility") under STG's existing credit facilities (the "Existing Credit Facilities") governed by STG's existing bank credit agreement (the "Existing Credit Agreement") and various holders of STG's outstanding 4.125% Senior Secured Notes due 2030 (the "Existing Secured Notes"), on the principal terms of new money financings and a debt recapitalization (the "Transactions") to strengthen the Company's balance sheet and better position it for long-term growth.
"The transactions, as contemplated in the TSA, demonstrate the strong support of our creditors in positioning the Company for long-term success by enhancing its financial liquidity and flexibility," said Chris Ripley, Sinclair's President and Chief Executive Officer. "The refinancings are expected to push our closest meaningful maturity to December 2029 and extend all of our maturities to a weighted average of 6.6 years, while materially reducing our first lien net leverage and improving our financial optionality, allowing us to continue to be opportunistic in the marketplace to deleverage over time while driving enhanced returns for all of the company's stakeholders."
The lenders of the Existing Term Loan Facility party to the TSA represent approximately 80% of the aggregate principal amount of STG's outstanding loans under its Existing Credit Facilities, and the holders of Existing Secured Notes party to the TSA represent approximately 75% of the aggregate principal amount of the Existing Secured Notes, which, in each case, is in excess of the consent thresholds necessary to permit the Transactions. By executing the TSA, the lenders and noteholders party thereto agreed to, among other things, (i) with respect to certain backstop lenders, provide a backstopped First-Out Term Loan Facility (as defined below); (ii) use commercially reasonable efforts to support and take all commercially reasonable actions necessary or reasonably requested by the Company to facilitate the consummation of the Transactions, and (iii) negotiate in good faith the applicable definitive documents consistent with the terms of the TSA.
The Transactions, once finalized, will provide for the following, including the amendment of certain existing debt documents to permit the following:
In addition, on or after the closing date of the Transactions, STG may incur other debt on a pari passu basis (as to payment and lien priority, including as to the application of proceeds with respect to, and distributions made on account of, collateral) with the First-Out Term Loan Facility and the First-Out Revolving Credit Facility, whether in the form of bonds, notes, loans or other debt instruments, and that has substantially the same collateral securing such debt as the First-Out Term Loan Facility and the First-Out Revolving Credit Facility (in each case after giving effect to any applicable transactions to merge any finance or "escrow" subsidiary which initially may issue such debt into STG or any guarantor(s)) (the "Other First-Out First Lien Debt").
The net proceeds from the incurrence of Other First-Out First Lien Debt or borrowings under the First-Out Term Loan Facility STG elects to borrow (if any), the net proceeds of any issuance of New Second Lien Notes for cash, and cash and/or draws under the Existing Revolving Credit Facility or the First-Out Revolving Credit Facility will be used to repay all of the outstanding $1,175 million of aggregate principal amount outstanding under our term loans B-2, to consummate the AHG Notes Repurchase (unless STG elects to effect the AHG Notes Exchange), and to pay related fees and expenses related to the Transactions.
The closing of the Transactions is conditioned on the satisfaction or waiver of certain conditions precedent, including finalizing definitive documents consistent with the TSA, receipt of the requisite consents from lenders under the Existing Credit Agreement and holders of Existing Secured Notes, and satisfaction or waiver of the conditions described in the TSA.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor a solicitation of consents from any holders of securities, nor shall there be any sale of securities or solicitation of consents in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Any solicitation or offer will only be made pursuant to a separate disclosure statement distributed to the relevant holders of securities.
Pillsbury Winthrop Shaw Pittman LLP and Fried Frank Harris Shriver & Jacobson LLP are serving as legal advisors to the Company and STG, and J.P. Morgan acted as exclusive advisor to Sinclair in connection with structuring and negotiating the transactions, with Simpson Thacher & Bartlett LLP acting as its counsel. Milbank LLP is serving as legal advisor to the Consenting Creditors, including the new money lenders providing the First-Out Term Loan Facility, and Perella Weinberg Partners LP is serving as financial advisor to the Consenting Creditors.
Forward-Looking Statements:
The matters discussed in this news release, particularly those in the section labeled "Outlook," include forward-looking statements regarding, among other things, future operating results. When used in this news release, the words "outlook," "intends to," "believes," "anticipates," "expects," "achieves," "estimates," and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions set forth therein, but not limited to, the occurrence of any event, change or other circumstance that could give rise to the termination of the TSA, the ability to negotiate and reach agreement on definitive documentation relating to the Transactions, the ability to satisfy closing conditions to the completion of the Transactions; the Company's ability to achieve the anticipated benefits from the Transactions; other risks related to the completion of the Transactions and actions related thereto, the Company's ability the rate of decline in the number of subscribers to services provided by traditional and virtual multi-channel video programming distributors ("Distributors"); the Company's ability to generate cash to service its substantial indebtedness; the successful execution of outsourcing agreements; the successful execution of retransmission consent agreements; the successful execution of network and Distributor affiliation agreements; the Company's ability to identify and consummate acquisitions and investments, to manage increased financial leverage resulting from acquisitions and investments, and to achieve anticipated returns on those investments once consummated; the Company's ability to compete for viewers and advertisers; pricing and demand fluctuations in local and national advertising; the appeal of the Company's programming and volatility in programming costs; material legal, financial and reputational risks and operational disruptions resulting from a breach of the Company's information systems; the impact of FCC and other regulatory proceedings against the Company; compliance with laws and uncertainties associated with potential changes in the regulatory environment affecting the Company's business and growth strategy; the impact of pending and future litigation claims against the Company; the Company's limited experience in operating or investing in non-broadcast related businesses; and any risk factors set forth in the Company's recent reports on Form 10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission. There can be no assurances that the assumptions and other factors referred to in this release will occur. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.
Category: Financial
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