Media General Sets Amended Credit Agreement

(RTTNews) — Media General Inc. today amended its existing bank credit agreement. The amended agreement provides for an extension of the maturity date of $363 million of bank debt from March 2013 to March 2015, in return for a partial pay down of amounts outstanding.

The trigger for the extension will be raising a minimum of $225 million from the issuance of new notes by May 25, 2012. Of the $225 million, a minimum of $190 million will be applied to pay down the outstanding term loan and an amount determined by formula will be set aside in a liquidity account.

The company said that its revolver is reduced to $45 million with no amount outstanding at this time. In addition to the term loan paydown, the revolver commitment will be correspondingly reduced if the liquidity account funding is increased by more than $15 million.

The company said it expects operating cash flow in 2012 will cover interest payments, capital expenditures of approximately $20 million and retirement plan contributions of approximately $13 million..

The amended bank term loan facility has an interest rate of LIBOR with a 1.5% floor plus a margin ranging from 5% to 7% (and commitment fees ranging from 2.25% to 2.50%), determined by the company’s leverage ratio. In addition to this cash interest, the company will accrue payment-in-kind (PIK) interest of 1.5%.