NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING |
3 Months Ended |
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Mar. 31, 2025 | |
| Debt Instrument [Line Items] | |
| NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING | NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING: Credit Agreement and Notes During the first quarter of 2025, Sinclair Television Group, Inc. (“STG”), a wholly-owned subsidiary of Sinclair Broadcast Group, LLC (“SBG”), completed a series of financing transactions (the “Transactions”) as follows: Exchanged $711.4 million aggregate principal amount outstanding of the $714 million Term Loan B-3, which mature April 1, 2028 and bear interest at SOFR plus 3.00%, into second-out first lien Term Loan B-6 issued under a new credit agreement dated February 12, 2025 (the “New Credit Agreement”), which mature December 31, 2029 and bear interest at SOFR plus 3.30%. Exchanged all of the $731.3 million aggregate principal amount outstanding of Term Loan B-4, which matured on April 21, 2029 and bore interest at SOFR plus 3.75%, into second-out first lien Term Loan B-7 issued under the New Credit Agreement, which mature December 31, 2030 and bear interest at SOFR plus 4.10%. Exchanged $575 million of commitments under the existing revolving credit facility into $575 million first-out first lien revolving commitments (the “First-Out Revolving Credit Facility”) under the New Credit Agreement, which mature February 12, 2030 and borrowings thereunder will bear interest at SOFR plus 2.00%. The existing bank credit agreement was amended as of February 12, 2025 (the “Amended Credit Agreement”) concurrent with the Transactions and entering into the New Credit Agreement, subordinating the secured obligations thereunder and eliminating substantially all covenants and certain events of default. As a result, the remaining $3 million of Term Loan B-3 and the remaining $75 million of commitments under the existing revolving credit facility are ranked as third lien obligations. STG issued $1,430 million aggregate principal amount of 8.125% first-out first lien secured notes due 2033 (the “8.125% First-Out Notes”), which mature on February 15, 2033. The proceeds from the 8.125% First-Out Notes were used to repay in full the $1,175 million aggregate principal amounts outstanding of Term Loan B-2 due 2026, approximately $63.6 million aggregate principal amount of 4.125% Senior Secured Notes due 2030 at 84% of the principal amount, and approximately $104 million aggregate principal amount of 5.125% Senior Notes due 2027 at 97% of the principal amount and to pay fees and expenses related to the Transactions. Exchanged $431 million aggregate principal amount of the existing 4.125% Senior Secured Notes due 2030 into 9.750% senior secured second lien notes due 2033 (the “9.750% Second Lien Notes”), which mature on February 15, 2033. Exchanged $239 million aggregate principal amount of the existing 4.125% Senior Secured Notes due 2030 into 4.375% second-out first lien secured notes due 2032 (the “4.375% Second-Out Notes”), which mature on December 31, 2032. The remaining 4.125% Senior Secured Notes due 2030 of $5 million became unsecured obligations as the related indenture was amended to release all liens on the collateral and eliminate substantially all covenants and certain events of default. For the three months ended March 31, 2025, we recognized a gain on extinguishment of the 4.125% Senior Secured Notes due 2030 and 5.125% Senior Notes due 2027 of $5 million and $3 million, respectively, and a loss on extinguishment of the Term Loan B-2 of $6 million. The New Credit Agreement and the indentures for the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes (collectively, the “New Indentures”) contain certain restrictive covenants including, but not limited to, restrictions on indebtedness, liens, restricted payments (including repayment of certain subordinated debt), investments, mergers, consolidations, sales and other dispositions of assets and affiliate transactions. These covenants are subject to a number of exceptions and limitations as described in the New Credit Agreement and New Indentures. The New Credit Agreement and New Indentures also include events of default, including certain cross-default and cross-acceleration provisions with other debt of STG, customary for agreements of its type. Prior to February 15, 2028, December 1, 2025, and February 15, 2027, we may redeem the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes, respectively, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the respective notes, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the New Indentures. On or prior to February 15, 2028 and February 15, 2027, we may redeem up to 40% of the aggregate principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, at a price equal to 108.125% and 109.750% of the principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the date of redemption using the proceeds of certain equity offerings. Prior to February 15, 2028 and February 15, 2027, we may redeem the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, in whole but not in part, at a redemption price equal to 108.125% and 109.750% of the principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the redemption date upon certain change of control transactions or certain significant acquisitions. Beginning on December 1, 2025, we may redeem some or all of the 4.375% Second-Out Notes at any time or from time to time at the redemption prices set forth in the New Indentures, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, upon the sale of certain of STG’s assets or certain changes of control, we may be required to offer to repurchase some or all of the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes. The First-Out Revolving Credit Facility includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the First-Out Revolving Credit Facility, measured as of the last day of each fiscal quarter, is utilized as of such date. Since there was no utilization under the First-Out Revolving Credit Facility as of March 31, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement. As of March 31, 2025, the STG first-out first lien leverage ratio was below 3.5x. The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2025. During the three months ended March 31, 2024, we repurchased $27 million aggregate principal amount of Term Loan B-2 for consideration of $25 million. The portions of Term Loan B-2 purchased were canceled immediately following their acquisition. We recognized a gain on extinguishment of the Term Loan B-2 of $1 million for the three months ended March 31, 2024. In April 2025, we repurchased $66 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $62 million. The 5.125% Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition. Finance Leases to Affiliates The current portion of notes payable, finance leases, and commercial bank financing in our consolidated balance sheets includes finance leases to affiliates of $3 million as of both March 31, 2025 and December 31, 2024. Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $8 million and $9 million as of March 31, 2025 and December 31, 2024, respectively. See Note 8. Related Person Transactions. Debt of Variable Interest Entities and Guarantees of Third-Party Obligations STG jointly, severally, unconditionally, and irrevocably guaranteed $2 million of debt of certain third parties as of both March 31, 2025 and December 31, 2024, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both March 31, 2025 and December 31, 2024. We provide a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $122 million with annual escalations of 4% for the next four years. As described under Note 4. Commitments and Contingencies, we believe that as of January 1, 2025, we have no further obligations related to this guarantee, however the counterparty associated with the related agreement may not agree with our conclusion. Interest Rate Swap We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and we receive a floating rate of interest based on SOFR. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies for further discussion. As of both March 31, 2025 and December 31, 2024, the fair value of the interest rate swap was an asset of $1 million, which is recorded in other assets in our consolidated balance sheets.
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| Sinclair Broadcast Group, LLC | |
| Debt Instrument [Line Items] | |
| NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING | NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING: Credit Agreement and Notes During the first quarter of 2025, Sinclair Television Group, Inc. (“STG”), a wholly-owned subsidiary of Sinclair Broadcast Group, LLC (“SBG”), completed a series of financing transactions (the “Transactions”) as follows: Exchanged $711.4 million aggregate principal amount outstanding of $714 million Term Loan B-3, which mature April 1, 2028 and bear interest at SOFR plus 3.00%, into second-out first lien Term Loan B-6 issued under a new credit agreement dated February 12, 2025 (the “New Credit Agreement”), which mature December 31, 2029 and bear interest at SOFR plus 3.30%. Exchanged all of the $731.3 million aggregate principal amount outstanding of Term Loan B-4, which matured on April 21, 2029, and bore interest at SOFR plus 3.75%, into second-out first lien Term Loan B-7 issued under the New Credit Agreement, which mature December 31, 2030 and bear interest at SOFR plus 4.10%. Exchanged $575 million of commitments under the existing revolving credit facility into $575 million first-out first lien revolving commitments (the “First-Out Revolving Credit Facility”) under the New Credit Agreement, which mature February 12, 2030 and borrowings thereunder will bear interest at SOFR plus 2.00%. The existing bank credit agreement was amended as of February 12, 2025 (the “Amended Credit Agreement”) concurrent with the Transactions and entering into the New Credit Agreement, subordinating the secured obligations thereunder and eliminating substantially all covenants and certain events of default. As a result, the remaining $3 million of Term Loan B-3 and the remaining $75 million of commitments under the existing revolving credit facility are ranked as third lien obligations. STG issued $1,430 million aggregate principal amount of 8.125% first-out first lien secured notes due 2033 (the “8.125% First-Out Notes”), which mature on February 15, 2033. The proceeds from the 8.125% First-Out Notes were used to repay in full the $1,175 million aggregate principal amounts outstanding of Term Loan B-2 due 2026, approximately $63.6 million aggregate principal amount of 4.125% Senior Secured Notes due 2030 at 84% of the principal amount, and approximately $104 million aggregate principal amount of 5.125% Senior Notes due 2027 at 97% of the principal amount and to pay fees and expenses related to the Transactions. Exchanged $431 million aggregate principal amount of the existing 4.125% Senior Secured Notes due 2030 into 9.750% senior secured second lien notes due 2033 (the “9.750% Second Lien Notes”), which mature on February 15, 2033. Exchanged $239 million aggregate principal amount of the existing 4.125% Senior Secured Notes due 2030 into 4.375% second-out first lien secured notes due 2032 (the “4.375% Second-Out Notes”), which mature on December 31, 2032. The remaining 4.125% Senior Secured Notes due 2030 of $5 million became unsecured obligations as the related indenture was amended to release all liens on the collateral and eliminate substantially all covenants and certain events of default. For the three months ended March 31, 2025, we recognized a gain on extinguishment of the 4.125% Senior Secured Notes due 2030 and 5.125% Senior Notes due 2027 of $5 million and $3 million, respectively, and a loss on extinguishment of the Term Loan B-2 of $6 million. The New Credit Agreement and the indentures for the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes (collectively, the “New Indentures”) contain certain restrictive covenants including, but not limited to, restrictions on indebtedness, liens, restricted payments (including repayment of certain subordinated debt), investments, mergers, consolidations, sales and other dispositions of assets and affiliate transactions. These covenants are subject to a number of exceptions and limitations as described in the New Credit Agreement and New Indentures. The New Credit Agreement and New Indentures also include events of default, including certain cross-default and cross-acceleration provisions with other debt of STG, customary for agreements of its type. Prior to February 15, 2028, December 1, 2025, and February 15, 2027, we may redeem the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes, respectively, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the respective notes, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the New Indentures. On or prior to February 15, 2028 and February 15, 2027, we may redeem up to 40% of the aggregate principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, at a price equal to 108.125% and 109.750% of the principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the date of redemption using the proceeds of certain equity offerings. Prior to February 15, 2028 and February 15, 2027, we may redeem the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, in whole but not in part, at a redemption price equal to 108.125% and 109.750% of the principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the redemption date upon certain change of control transactions or certain significant acquisitions. Beginning on December 1, 2025, we may redeem some or all of the 4.375% Second-Out Notes at any time or from time to time at the redemption prices set forth in the New Indentures, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, upon the sale of certain of STG’s assets or certain changes of control, we may be required to offer to repurchase some or all of the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes. The First-Out Revolving Credit Facility includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the First-Out Revolving Credit Facility, measured as of the last day of each fiscal quarter, is utilized as of such date. Since there was no utilization under the First-Out Revolving Credit Facility as of March 31, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement. As of March 31, 2025, the STG first-out first lien leverage ratio was below 3.5x. The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2025. During the three months ended March 31, 2024, STG purchased $27 million aggregate principal amount of Term Loan B-2, due September 30, 2026, for consideration of $25 million. The portions of Term Loan B-2 purchased were canceled immediately following their acquisition. STG recognized a gain on extinguishment of the Term Loan B-2 of $1 million for the three months ended March 31, 2024. In April 2025, STG repurchased $66 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $62 million. The 5.125% Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition. Finance Leases to Affiliates The current portion of notes payable, finance leases, and commercial bank financing in SBG’s consolidated balance sheets includes finance leases to affiliates of $3 million as of both March 31, 2025 and December 31, 2024. Notes payable, finance leases, and commercial bank financing, less current portion, in SBG’s consolidated balance sheets includes finances leases to affiliates of $8 million and $9 million as March 31, 2025 and December 31, 2024, respectively. See Note 7. Related Person Transactions. Debt of Variable Interest Entities and Guarantees of Third-Party Obligations STG jointly, severally, unconditionally, and irrevocably guaranteed $2 million of debt of certain third parties as of both March 31, 2025 and December 31, 2024, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both March 31, 2025 and December 31, 2024. SBG provides a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $122 million with annual escalations of 4% for the next four years. As described under Note 4. Commitments and Contingencies, SBG believes that as of January 1, 2025, SBG has no further obligations related to this guarantee, however the counterparty associated with the related agreement may not agree with SBG’s conclusion. Interest Rate Swap SBG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of SBG’s exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and SBG receives a floating rate of interest based on SOFR. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies for further discussion. As of both March 31, 2025 and December 31, 2024, the fair value of the interest rate swap was an asset of $1 million which is recorded in other assets in SBG’s consolidated balance sheets.
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