Gannett Co. is seeking to opportunistically refinance its existing term loan under its senior secured credit facilities. The Company intends to issue senior secured notes to refinance a portion of the term loan and refinance the remainder of the existing term loan with a new senior secured term loan. The proposed refinancing transactions are subject to market and other conditions, and the Company can give no assurances that it will complete any such transactions, in whole or in part, or as to the amount or timing of any such transactions.

Senior Secured Term Loan

The new senior secured term loan would be in a principal amount up to $550 million (the “Credit Agreement”). Gannett Holdings LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company, would be the borrower under the Credit Agreement (the “Borrower”), and lenders are anticipated to include funds managed by affiliates of Apollo Capital Management L.P. Upon closing, the net proceeds of the loans will be used to refinance a portion of the Company’s existing term loan.

Loans under the Credit Agreement are expected bear interest at a per annum rate equal to LIBOR plus a margin of 5.00% with a floor of 50 basis points. All obligations under the Credit Agreement will be secured by all or substantially all of the assets of the Company and the direct and indirect material domestic subsidiaries of the Company (the “Guarantor Subsidiaries”). The obligations of the Borrower under the Credit Agreement are guaranteed on a senior secured basis by the Company and the Guarantor Subsidiaries. The completion of the Credit Agreement is contingent upon the successful offering of senior secured notes.

Third Quarter 2021 Operating Highlights

During the third quarter of 2021, the Company has repaid approximately $65.0 million in principal under its existing 5-year term loan using the proceeds from $38.6 million of real estate and other asset sales and excess cash, bringing the 5-year term loan principal down to $925.7 million. The Company is scheduled to make the first amortization payment of $26.1 million on September 30, 2021 and expects to end the quarter with the 5-year term loan principal under $900 million and to have approximately $130 million of cash and cash equivalents.

During the third quarter of 2021 the Company continues to expect its overall revenue to be down slightly year-over-year and continues to expect growth year-over-year on a same store basis. Adjusted EBITDA for the third quarter of 2021 is expected to grow as compared with Adjusted EBITDA for the third quarter of 2020. The Company now expects that its Adjusted EBITDA margin1 in the third quarter of 2021 will be approximately 12-13% versus approximately 13.7% in the first half of 2021. The margin outlook is being impacted by inflationary pressures on newsprint and delivery as well as the resurgence in the COVID-19 pandemic and the associated negative impact on single copy circulation revenue and the events business, including the ability to host in-person endurance races and local community events.