Media General plans $445 million credit facility for refinancing

By Sara Rosenberg

New York, May 17 - Media General Inc. will be getting a new $445 million credit facility that will be used to repay all of its existing bank debt due March 2013, according to a news release.

The deal is being led by J.P. Morgan Securities LLC and will be provided by Berkshire Hathaway Inc.

The facility consists of a $400 million first-lien term loan due May 2020 and a $45 million revolver.

Pricing on the term loan is 10½%, with a step-down to 9% if total leverage is 3.5 times, and it is being issued at a discount of 881/2.

The term loan is secured pari passu with the company's existing 11¾% senior secured notes due 2017.

Closing on the credit facility is expected to occur by May 24.

In conjunction with the new financing, Media General will issue Berkshire Hathaway penny warrants for about 4.6 million class A shares, which represents 19.9% of Media General's existing shares outstanding, and Berkshire Hathaway has the option to nominate a director to Media General's board of directors.

Also, Media General announced on Thursday that it is selling all of its newspapers, with the exception of the Tampa group, for $142 million in cash to Berkshire Hathaway subsidiary BH Media Group.

The company is in discussions with other prospective buyers for its Tampa print assets.

Closing on the newspaper sale to Berkshire Hathaway is expected to occur on June 25, subject to customary conditions including approval under Hart-Scott-Rodino.

After transaction fees and retaining $25 million of cash, proceeds from the sale will be offered toward the repayment of existing senior secured notes, and any remaining funds will be used to pay down the new term loan at par.

Media General is a Richmond, Va.-based provider of news, information and entertainment across multiple media platforms.

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