Tuesday, November 17, 2020

Gannett Refinances Debt

Gannett, owner of USA TODAY and more than 260 other daily publications, announced Tuesday that it has refinanced about $500 million in debt in a deal that will save the company money on interest payments and lead to a quicker reduction of its liabilities.

The media company refinanced nearly one-third of the loan from private equity firm Apollo Global Management that financed the merger of GateHouse Media parent New Media Investment Group and the business previously known as Gannett. The combined organization took the name Gannett.

In the year since the merger was finalized, Gannett has said one of its top financial goals was to reduce its debt as quickly as possible and eventually refinance to reduce its interest obligations.

Gannett CEO and Chairman Michael Reed told investors in a Nov. 3 conference call that the company would use $100 million in proceeds from recent asset sales to reduce its liabilities in the fourth quarter. Those proceeds included the sale of business information and marketing solutions provider BridgeTower Media to Los Angeles-based private equity firm Transom Capital Group.

The refinanced portion of Gannett’s debt carries an interest rate of 6% and a maturation date of 2027, replacing debt that was owed to Apollo at a rate of 11.5% and due in 2024.

The move will save Gannett about $28 million a year in interest payments.

“These savings will be used to accelerate repayment of our term loan,” Reed said in a statement, adding that “we believe that this refinancing paves the way for a refinancing of the remaining term loan by reducing the outstanding balance.”

The refinancing leaves Gannett with about $1.12 billion in debt owed to Apollo, “which we believe we can refinance on attractive terms by the end of the first half of 2021,” Reed said.

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