Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, according to people with knowledge of the matter.
The broadcaster is seeking to raise at least $750 million in the high-yield bond market, said the people, who asked not to be identified discussing private information. The transaction could swell to $1 billion, depending on how much demand the underwriting banks can secure from investors, the people said.
Goldman Sachs hosted a call with Gray’s management and select investors to discuss a riskier, second-lien bond that would replace Gray’s unsecured bonds that comes due in 2027, and a term loan due in 2029, said the people. A transaction could launch as soon as next week, though talks are ongoing and a deal may not materialize, they said.
A representative for Goldman Sachs declined to comment, while a representative for Gray didn’t immediately respond to a request for comment.
In May 2024, the company raised $1.75 billion in the debt markets, obtaining $500 million through a leveraged loan and $1.25 billion in junk bonds. The loan, which priced 5.25 percentage points over the Secured Overnight Financing Rate and matures in 2029, is what would be refinanced by the proposed second-lien bonds, according to the people.
Before the 2024 deal, Gray had planned a $1.19 billion leveraged loan transaction. However, the transaction was postponed after investors grew concerned over potential competition from the likes of Walt Disney Co., Fox Corp. and Warner Bros Discovery Inc., which had announced plans to launch sports-focused streaming services.
Companies such as Gray have been left hamstrung by a decline in traditional television viewership and a rise in streaming services, which have attracted both advertisers and consumers.
Gray, while the second-largest television broadcast group in the US, “must continue to focus on its debt reduction efforts and effectively implement cost reductions” to keep its B2 credit grade from Moody’s Ratings, according to a report that affirmed the rating in December.
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