Item 1.01 Entry into a Material Definitive Agreement.
On July 3, 2019, Nexstar Escrow, Inc. (the “Escrow Issuer”), a wholly owned subsidiary of Nexstar Media Group, Inc. (the “Company”), completed the issuance and sale of $1,120.0 million aggregate principal amount of 5.625% senior notes due 2027 (the “Notes”). The Notes were issued pursuant to an Indenture, dated July 3, 2019 (the “Indenture”), by and among the Escrow Issuer, as issuer, and Citibank, N.A., as trustee (the “Trustee”). The Escrow Issuer, which was created solely to issue the notes, has deposited the gross proceeds of the offering into a segregated escrow account until the date that certain escrow release conditions are satisfied. Prior to the consummation of the Merger (as defined herein), the Notes will be secured by a first-priority security interest in the escrow account and all deposits and investment property therein.
Among other things, the escrow release conditions include the consummation of the closing of the merger (the “Merger”) of the Company and Tribune Media Company (“Tribune Media”) pursuant to an Agreement and Plan of Merger, dated as of November 30, 2018 (the “Merger Agreement”), and the assumption by Nexstar Broadcasting, Inc. (“NBI”) of all of the obligations of the Escrow Issuer under the Notes. Upon the release of the proceeds of the Notes from escrow (the “Escrow Release Date”), the Notes will be guaranteed by the Company, Mission Broadcasting, Inc. (“Mission”) and certain of NBI’s and Mission’s future restricted subsidiaries on a senior unsecured basis. If the Merger is not consummated on or prior to November 30, 2019, with an automatic extension to February 29, 2020 if necessary to obtain regulatory approval under circumstances specified in the Merger Agreement, the Notes will be redeemed by a special mandatory redemption. The special mandatory redemption price will be equal to 100% of the initial issue price of the Notes, plus accrued and unpaid interest, if any, from the issue date of the Notes, up to, but not including, the date of such special mandatory redemption.
As used herein, the term “Issuer” refers to the Escrow Issuer prior to the Escrow Release Date and NBI after the Escrow Release Date.
The Notes were issued in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act. The Notes were issued at par. The Escrow Issuer will use the net proceeds of the offering to finance a portion of the cash consideration of the Merger.
The Notes are the Issuer’s senior obligations, rank equal in right of payment with all of the Issuer’s existing and future senior indebtedness and rank senior in right of payment to all of the Issuer’s future subordinated indebtedness. The Notes and the guarantees are effectively junior to the Issuer’s secured indebtedness.
The Notes will mature on July 15, 2027. Interest on the Notes accrues at a rate of 5.625% per annum and is payable semiannually in arrears on January 15 and July 15 of each year, commencing on January 15, 2020. The Issuer is obligated to make each interest payment to the holders of record of the Notes on the immediately preceding January 1 and July 1.
The Issuer has the option to redeem all or a portion of the Notes at any time prior to July 15, 2022 at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to the redemption date plus a “make-whole” premium. At any time on or after July 15, 2022, the Issuer may redeem the Notes, in whole or in part, at the redemption prices set forth in the Indenture. At any time before July 15, 2022, the Issuer may also redeem up to 40% of the aggregate principal amount of the Notes at a redemption price of 105.625% of the principal amount, plus accrued and unpaid interest, if any, to the date of redemption, with the proceeds of certain equity offerings.
Upon the occurrence of a Change of Control Repurchase Event (as defined in the Indenture), each holder of the Notes may require the Issuer to repurchase all or a portion of the Notes in cash at a price equal to 101% of the aggregate principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, thereon to the date of repurchase.
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