Salem Communications announced the early settlement of its previously announced cash tender offer for any and all of its $213.5 million aggregate principal amount of 9.625% Senior Secured Second Lien Notes due 2016.
In conjunction with the offer, Salem entered into new senior secured credit facilities, consisting of a term loan of up to $300.0 million and a revolving credit facility of up to $25.0 million pursuant to a Credit Agreement by and among Salem, as borrower, Wells Fargo Bank as administrative agent, Swingline Lender, L/C Issuer and a Lender, the other lenders party thereto, Wells Fargo Securities, LLC, SunTrust Robinson Humphrey, Inc. and Rabobank, N.A., as Joint Lead Arrangers and Joint Bookrunners, SunTrust Bank, as Syndication Agent, and Rabobank, N.A., as Documentation Agent.
Salem will use the proceeds of the term loan to fund the offer, to retire all other outstanding corporate debt and to pay related fees and expenses. Upon entry into the Term Loan and the Revolving Credit Facility, Salem's current revolving credit facility, indebtedness due to First California Bank, and subordinated debt due to related parties will be terminated. Going forward, the proceeds of the revolving credit facility will be used to provide ongoing working capital and for other general corporate purposes (including permitted acquisitions) of Salem and its subsidiaries.
Borrowings under the term loan may be made at LIBOR (subject to a floor of 1.00%) plus a spread of 3.50% or Wells Fargo's base rate plus a spread of 2.50%. Borrowings under the revolving credit facility may be made at LIBOR or Wells Fargo's base rate plus a spread determined by reference to Salem's leverage ratio, as set forth in a pricing grid contained in the Credit Agreement. If an event of default occurs under the Credit Agreement, the applicable interest rate may increase by 2.00% per annum.
Salem Communications Corporation is the largest commercial U.S. radio broadcasting company that provides programming targeted at audiences interested in Christian and conservative opinion radio content.