Monday, November 23, 2020

GANNETT PRESS RELEASE: Owner of St. Augustine Record, Times-Union, Refinances Some of Its 11.5% Interest Debt


Gannett Announces Refinancing of Approximately $500 million of Debt


MCLEAN, Va.--(BUSINESS WIRE)-- Gannett Co., Inc. ("Gannett", "we", "us", "our", or the “Company") (NYSE: GCI) today announced that it has refinanced approximately $500 million of its 11.5% term loan, maturing in 2024, with 6.0% convertible notes due in 2027. The refinancing reduces the outstanding term loan to $1.118 billion.

“We are pleased to announce the refinancing, which we believe has three key benefits,” said Michael Reed, Gannett Chairman and Chief Executive Officer. “First, it generates significant savings, reducing our annual interest expense by approximately $28 million per year. These savings will be used to accelerate repayment of our term loan. Second, we believe that this refinancing paves the way for a refinancing of the remaining term loan by reducing the outstanding balance. And third, it extends the maturity of approximately $500 million of debt by three years. Since putting the term loan in place in November 2019, we have repaid over $175 million to date, and we expect to repay an additional $100 million in the coming months. Pro forma for these repayments, the outstanding term loan will be approximately $1 billion, which we believe we can refinance on attractive terms by the end of the first half of 2021. As we improve the Company’s capital structure, we are also seeing continued improvement in our revenue trends, which we expect will drive strong fourth quarter results.”

"Apollo and its funds are pleased to continue to support Gannett, its strong management team, and its commitment to premium journalism,” said Robert Givone, Partner and Co-Head Opportunistic Credit. “Working collaboratively, we crafted a creative approach to address Gannett’s desire to rapidly strengthen its balance sheet. The refinancing is indicative of the types of capital solutions that Apollo is uniquely situated to provide to great companies."

The refinancing was unanimously approved by the Company’s Board of Directors. The Company was advised by Greenhill & Co., LLC and Cravath, Swaine & Moore LLP.

Additional Information about the Notes

On November 17, 2020, the Company entered into an Exchange Agreement with the lenders under the Company’s senior secured 11.5% term loan Credit Agreement dated November 19, 2019 (the “Credit Agreement”) pursuant to which the Company and such lenders agreed to exchange $497.1 million in aggregate principal amount of the Company’s newly issued 6.0% Senior Secured Convertible Notes due 2027 (the “Notes”) for the retirement of an equal amount of term loans under the Credit Agreement (the “Exchange”). Following the Exchange, the outstanding balance under the Credit Agreement is $1.118 billion (the “Remaining Term Loan”). The interest expense savings from the Exchange will be applied to reduce the outstanding amount of the Remaining Term Loan (the “Required Amortization”).

The Notes were issued pursuant to an Indenture (the “Indenture”) dated as of November 17, 2020, between the Company and U.S. Bank National Association, as trustee. The Company will pay interest on the Notes at an annual rate of 6.0% payable on June 1 and December 1 of each year, beginning on June 1, 2021. The Notes will mature on December 1, 2027, unless earlier repurchased or converted. The Indenture includes affirmative and negative covenants that are substantially consistent with the Remaining Term Loan, as well as customary events of default.

In connection with the Exchange, the Credit Agreement has been amended to, among other things, require quarterly amortization payments in an amount equal to the interest rate savings resulting from the Exchange for the applicable quarter.

The holders of the Notes will be entitled to customary registration rights with respect to their as-converted Common Stock (subject to minimum registration amounts, blackout periods and limitations on the number of demands) following the 30-day anniversary of the closing date.


The Notes may be converted at any time by the holders into cash, shares of the Company’s common stock (“Common Stock”) or any combination of cash and Common Stock, at the Company’s election (except as discussed in the next paragraph). The initial conversion rate is 200 shares of Common Stock per $1,000 principal amount of the Notes (which is equal to a conversion price of $5.00 per share of Common Stock (the “Conversion Price”), representing a conversion premium of approximately 187% based on the closing price of $1.74 per share of Common Stock on November 16, 2020).

The issuance of Common Stock upon conversion of the Notes is subject to approval of the Company’s stockholders pursuant to Rule 312 of the Listed Company Manual of the New York Stock Exchange. As promptly as practicable after the issuance date (and in any event within 30 business days after the issuance date), the Company will prepare and file a proxy statement with the Securities and Exchange Commission that includes a proposal for the Company’s shareholders to approve the issuance of Common Stock upon conversion of the Notes as required under the rules and regulations of the New York Stock Exchange (the “Full Conversion”) at a special meeting of the Company’s shareholders. If the required shareholder approval is not obtained, (1) the Company will seek shareholder approval of the Full Conversion at the Company’s 2021 annual meeting and (2) the Notes that would upon conversion into Common Stock represent more than 19.9% of the existing total Common Stock of the Company will be convertible into cash only, until such shareholder approval is received. If, on the one-year anniversary of the issuance date, the shareholders have not received approval and the Remaining Term Loan is still outstanding, the coupon of the Notes will increase by 1.50% and the Required Amortization will be adjusted accordingly. If, on the two-year anniversary of the issuance date, the shareholders have not received approval and the Remaining Term Loan is still outstanding, the coupon will increase by an additional 1.50% and the Required Amortization will be adjusted accordingly.

The conversion rate is subject to customary adjustment provisions as provided in the Indenture. In addition, the conversion rate will be subject to adjustment in the event of any issuance or sale of Common Stock (or securities convertible into Common Stock) at a price equal to or less than the Conversion Price in order to ensure that following such issuance or sale, the Notes would be convertible into approximately 42% of the Common Stock after giving effect to such issuance or sale (assuming the initial principal amount of the Notes remains outstanding).

Upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. If a “Fundamental Change” (as defined in the Indenture) occurs, the Company will be required to offer to repurchase the Notes at a repurchase price of 110% of the principal amount thereof.

Permitted Refinancing of Remaining Term Loan

The Company may refinance the Remaining Term Loan with new first lien debt, as long as the new first lien debt satisfies the requirements of a Permitted Refinancing. New first lien debt will constitute a “Permitted Refinancing” so long as, among other things, (a) the principal amount of the new debt does not exceed the balance of the Remaining Term Loan (plus interest and fees), (b) the all-in-yield of the new debt does not exceed 9.5% per annum and (c) the other terms of the new debt are no less favorable to the Company.

In the event that the Company proposes to enter into a Permitted Refinancing, Holders of the Notes will have the option to require the Company to repurchase their Notes at a price equal to 101.5% of par, which amount will increase by 1.5% on each three month anniversary of the issuance date of the Notes. The Indenture permits the Company to raise additional first lien or second lien debt to finance any such repurchases, subject to certain conditions set forth therein.

Other Put Rights

Holders of the Notes will have the right to put up to approximately $100 million of the Notes at par, (a) for as long as the Remaining Term Loan remains outstanding, on or after the fourth anniversary of the issuance date, or (b) after a Permitted Refinancing, on or after the date that is 91 days after the maturity date of such Permitted Refinancing.

Redemption Rights

Until the four-year anniversary of the issuance date, the Company will have the right to redeem for cash up to approximately $100 million of the Notes at a redemption price of 130% of the principal amount thereof, with such amount reduced ratably by any principal amount of Notes that has been converted by the holders or redeemed or purchased by the Company.


The Notes are guaranteed by Gannett Holdings LLC and any subsidiaries of the Company (collectively, the “Guarantors”) that guarantee the Remaining Term Loan. The Notes will be secured by the same collateral securing the Remaining Term Loan. The Notes rank as senior secured debt of the Company, with the following collateral priorities: (i) prior to a Permitted Refinancing of the Remaining Term Loan, the Notes and Remaining Term Loan will share in the collateral under the Remaining Term Loan on a pari passu basis; and (ii) following any Permitted Refinancing, the Notes will be secured by a second priority lien on the same collateral package securing the indebtedness incurred in connection with the Permitted Refinancing.

About Gannett

Gannett Co., Inc. (NYSE: GCI) is an innovative, digitally focused media and marketing solutions company committed to the communities in our network and helping them build relationships with their local businesses. With an unmatched reach at the national and local level, Gannett touches the lives of millions with our Pulitzer-Prize winning content, consumer experiences and benefits, and advertiser products and services. Its portfolio includes the USA TODAY, local media organizations in 46 states in the U.S. and Guam, and Newsquest, a wholly owned subsidiary with over 140 local media brands operating in the United Kingdom. Gannett also owns the digital marketing services companies ReachLocal, Inc., UpCurve, Inc., and WordStream, Inc. and runs the largest media-owned events business in the U.S., Gannett Ventures, formerly GateHouse Live. To connect with us, visit

Cautionary Statement Regarding Forward-Looking Statements

Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our expectations, in terms of both amount and timing, with respect to debt repayment and debt refinancing, and statements regarding expected earnings results. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties. These and other risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

For investor inquiries, contact: 
Ashley Higgins 
Investor Relations 

For media inquiries, contact: 
Stephanie Tackach 
Director, Public Relations 

Source: Gannett Co., Inc.

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