Gray Media replaces $675m of 10.5% debt with 7.5% notes as refinancing pushes maturity to 2034

Gray Media, Inc. (NYSE: GTN) has completed a US$750 million offering of 7.500% senior secured first lien notes due 2034, using the proceeds principally to redeem US$675 million of significantly more expensive 10.500% notes due 2029 and repay US$21 million outstanding under its revolving credit facility. The refinancing does not eliminate Gray’s leverage, but it materially reduces the coupon attached to the debt being replaced while pushing that portion of its maturity profile another five years into the future.

The new notes were issued at par and begin accruing interest from August 21, with semiannual payments beginning March 15, 2027. They mature on September 15, 2034 and are guaranteed on a senior secured first lien basis by the restricted subsidiaries that also guarantee Gray’s existing senior credit facility.

Gray expects to complete redemption of the US$675 million block of 2029 notes on August 27. Once that occurs, approximately US$350 million of the 10.500% notes will remain outstanding, meaning the transaction removes roughly 66% of the principal still outstanding in that series before the latest redemption rather than eliminating the high-coupon debt entirely.

How much interest could Gray Media save by replacing 10.5% debt with 7.5% notes?

The US$675 million of notes targeted for redemption carries a 10.500% coupon, implying approximately US$70.9 million of annual interest on that principal amount. Financing the equivalent US$675 million at the new 7.500% coupon would imply about US$50.6 million of annual interest, a difference of approximately US$20.25 million per year before considering fees, the call premium, accrued interest or other elements of the transaction.

The entire US$750 million new issue carries approximately US$56.25 million of annual coupon expense. The additional US$75 million beyond the US$675 million being refinanced helps cover the US$21 million revolver repayment and transaction-related costs including the redemption premium and accrued interest.

The interest comparison therefore should not be interpreted as US$20.25 million of immediate company-wide net savings. Gray is issuing more new-note principal than the amount of 2029 debt being redeemed, and the revolving credit borrowing being repaid carries its own interest expense. What the disclosed terms establish clearly is that the specific US$675 million block being refinanced moves from a 10.5% coupon to a 7.5% financing environment.

The remaining US$350 million of 2029 notes still carries the 10.500% coupon. At that rate, the residual block represents approximately US$36.75 million of annual coupon expense if it remains outstanding for a full year, giving Gray another obvious liability-management target before 2029.

How does the $750m deal fit Gray Media’s wider debt reduction programme?

Gray had US$2.460 billion of gross indebtedness at June 30, down from US$2.867 billion at the end of 2025. Net debt fell to US$2.057 billion from US$2.294 billion, while trailing 12-month adjusted EBITDA was US$855.9 million. That lowered the reported gross leverage ratio to 2.9 times from 3.4 times and net leverage to 2.4 times from 2.7 times.

The latest US$750 million note issue is equivalent to roughly 30% of that June-end gross debt figure, but it should not be treated as a 30% increase in leverage because the majority of the proceeds are replacing existing borrowings. The transaction is fundamentally about refinancing composition, coupon cost and maturity management rather than raising US$750 million of incremental capital for acquisitions or operating expenditure.

Gray had already been addressing the 2029 notes directly. On July 21, it repurchased US$100 million principal of the same 10.500% notes, alongside US$20 million of 5.375% senior notes due 2031, using available liquidity including cash and revolving-credit borrowings.

That sequence helps explain the current transaction. Gray first used liquidity to retire part of the expensive 2029 debt and has now accessed the bond market for a much larger refinancing that extends maturity while lowering the coupon by three percentage points on the principal being replaced.

Why does extending the maturity to 2034 matter for Gray Media?

Broadcasting remains a business where cash generation can vary with political advertising cycles, retransmission economics, local advertising demand and acquisition activity. A large debt maturity concentrated in 2029 would therefore create refinancing exposure only three years away, while the new notes push a substantial portion of that obligation into 2034.

The extension gives management more time to reduce leverage from operating cash flow, dispose of assets if appropriate or refinance remaining obligations under different market conditions. It also reduces dependence on a single future refinancing window, although Gray continues to carry secured debt and still has US$350 million of the high-cost 2029 notes outstanding.

Credit markets are not treating the new securities as low-risk corporate debt. S&P Global Ratings assigned the proposed 2034 notes a B+ issue-level rating with a recovery rating of 1, reflecting Gray’s leveraged capital structure even though the notes benefit from first-lien security.

Gray had also issued US$845 million of 7.250% first-lien notes due 2033 through transactions completed in July 2025 and June 2026, showing that management has progressively rebuilt its maturity ladder through secured bond financing.

The August refinancing improves one important part of that structure without completing the job. Gray is reducing the annual coupon burden on US$675 million of debt, eliminating US$21 million of revolver borrowings and pushing the refinanced principal from 2029 toward 2034. What remains is the more difficult long-term task: using the longer runway to continue lowering absolute debt rather than simply moving maturities further out.