Nexstar Media Group, Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Nexstar Broadcasting Group, Inc. (the "Company") on October 2, 2013, reporting events that occurred on October 1, 2013. The filing details significant capital structure transactions involving the Company and its wholly-owned subsidiary, Nexstar Broadcasting, Inc., as well as Mission Broadcasting, Inc. ("Mission").
Key Financial Metrics and Capital Transactions
- Senior Notes Issuance: Nexstar Broadcasting issued $275.0 million aggregate principal amount of senior notes due 2020. The notes were issued at 100.250% plus accrued interest.
- Interest Rate: The new notes accrue interest at 6.875% per annum, payable semiannually.
- Credit Facility Amendments:
- Term Loan B-2 Commitments: Incremental term loans of $25.0 million for Nexstar Broadcasting and $125.0 million for Mission.
- Tranche A Revolving Commitments: Replacement revolving facilities of $75.0 million for Nexstar Broadcasting and $30.0 million for Mission.
- Debt Refinancing: The Company received consents from holders of 93.04% of its outstanding 8.875% Senior Secured Second Lien Notes due 2017 to amend the indenture and release collateral liens.
Material Changes and Use of Proceeds
The Company intends to use the net proceeds from the $275.0 million note offering, combined with proceeds from the amended credit facilities and cash on hand, for the following purposes:
- Repurchasing outstanding 8.875% Senior Secured Second Lien Notes due 2017.
- Funding the proposed acquisition of five television stations in four markets from Citadel Communications, L.P. and Stainless Broadcasting, L.P.
- Paying related fees, expenses, and for general corporate purposes.
The amendments to the 2017 Notes indenture eliminate substantially all restrictive covenants and release liens on collateral securing those obligations, subject to the acceptance of tendered notes.
Outlook, Risks, and Covenants
- Covenants: The new 2020 Notes indenture includes covenants limiting the ability to incur additional debt, issue preferred stock, make restricted payments, sell assets, enter into affiliate transactions, create liens, pay dividends, make investments, or merge. These are subject to exceptions.
- Registration Rights: The Company agreed to file a registration statement to exchange the private placement notes for publicly tradable notes. Failure to meet these obligations triggers an additional interest rate penalty of up to 1.0% per annum.
- Redemption: The Company may redeem the 2020 Notes prior to November 15, 2015, at a "make-whole" premium. Up to 35% of the principal may be redeemed prior to that date at 106.875% using equity offering proceeds.
- Change of Control: Holders may require repurchase at 101% of principal plus accrued interest upon a Change of Control Repurchase Event.
Investor Verification Checklist
- Verify the final closing of the acquisition of five television stations from Citadel Communications and Stainless Broadcasting.
- Confirm the successful exchange of the 2017 Notes and the release of collateral liens as outlined in the First Supplemental Indenture.
- Monitor the Company's compliance with the registration rights agreement to avoid additional interest penalties.
- Review the impact of the new debt covenants on future dividend payments and capital expenditures.
- Assess the Company's leverage ratio post-refinancing to ensure compliance with the amended credit facility terms.