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Long-term Debt - LIN Television

12 Months Ended

Dec. 31, 2011

Note 7—Long-term Debt

Debt consisted of the following (in thousands):

	December 31,

	2011		2010
Senior Secured Credit Facility:
Revolving credit loans	$	35,000	$	—
$125,000 Term loans, net of discount of $604 as of December 31, 2011		124,396		—
$260,000 Incremental term loans, net of discount of $2,594 as of December 31, 2011		257,406		—
2009 Senior Secured Credit Facility:
Term loans		—		9,573
8³/8% Senior Notes due 2018		200,000		200,000
6¹/2% Senior Subordinated Notes due 2013		166,773		275,883
$85,426 and $141,316 6¹/2% Senior Subordinated Notes due 2013—Class B, net of discount of $1,228 and $3,512 as of December 31, 2011 and 2010, respectively		84,198		137,804
Other debt		944		—

Total debt		868,717		623,260
Less current portion		253,856		9,573

Total long-term debt	$	614,861	$	613,687

Senior Secured Credit Facility

On October 26, 2011, we entered into a credit agreement governing our senior secured credit facility with JP Morgan Chase Bank, N.A. ("JPMorgan"), Administrative Agent, and the banks and other financial institutions party thereto. Our senior secured credit facility is comprised of a six-year, $125 million term loan and a five-year, $75 million revolving credit facility, and bears interest at a rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, and (iii) the one-month LIBOR rate plus 1%. In addition, the rate we select also bears an applicable margin based upon our Consolidated Senior Secured Leverage Ratio, currently set at 3.00% and 2.00% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility is subject to a commitment fee based upon our Consolidated Senior Secured Leverage Ratio, currently set at 0.50% for both LIBOR based loans and ABR rate loans. Concurrent with the closing of our senior secured credit facility, we terminated the credit agreement governing our 2009 senior secured credit facility.

The terms of the credit agreement provide for customary representations and warranties, affirmative and negative covenants (including financial covenants), and events of default. The credit agreement also provides for the payment of customary fees and expenses by us. The credit facilities available under the the credit agreement can be accelerated upon events of default and require the term loans to be prepaid under certain circumstances with amounts determined by reference to the proceeds from certain asset sales (subject to reinvestment rights), the incurrence of certain indebtedness and a percentage of annual excess cash flow.

The credit facilities are senior secured obligations and rank senior in right of payment to our existing and future subordinated indebtedness. LIN TV and certain of our existing, or hereafter created or acquired, domestic subsidiaries guarantee the credit facilities on a senior basis. LIN Television and each of our subsidiary guarantors have granted a security interest in all or substantially all of our assets to secure the obligations under senior secured credit facility, and LIN TV Corp. has granted a security interest in its capital stock of LIN Television to secure such obligations.

Our senior secured credit facility permits us to prepay loans and to permanently reduce the revolving credit commitments, in whole or in part, at any time. We are also obligated to make mandatory quarterly principal payments. In addition, our senior secured credit facility restricts the use of proceeds from asset sales not reinvested in our business and the use of proceeds from the issuance of debt (subject to certain exceptions), which must be used for mandatory prepayments of principal of the term loans.

The credit agreement governing our senior secured credit facility also requires on an annual basis, following the delivery of our year-end financial statements, and commencing after the year ended December 31, 2012, mandatory prepayments of principal of the term loans based on a computation of excess cash flow for the preceding fiscal year, as more fully described in the credit agreement.

On December 21, 2011, we and JPMorgan as Lender and Administrative Agent, signed an incremental term loan activation notice creating an incremental term loan facility pursuant to our existing credit agreement dated October 26, 2011, by and among us, JPMorgan, as Administrative Agent, and the banks and other financial institutions party thereto. The incremental term loan facility is a seven-year, $260 million term loan facility and is subject to the terms of our credit agreement. Borrowings under the incremental term loan facility were used (i) to pay the call price for our redemption of all of our remaining Senior Subordinated Notes, as described below, and (ii) to pay accrued interest, fees and expenses associated with the redemption. Borrowings under the incremental term loan facility bear interest at a rate based, at our option, on an adjusted LIBOR rate, plus an applicable margin of 3.75%, or an adjusted Base Rate, plus an applicable margin of 2.75%; provided that the adjusted LIBOR rate shall at no time be less than 1.25% per annum.

The incremental term loan facility is a senior secured obligation and ranks senior in right of payment to our existing and future subordinated indebtedness. The incremental term loan facility is guaranteed and secured on the same basis as the other credit facilities under the credit agreement. If we do not refinance, redeem or discharge our Senior Notes on or prior to January 15, 2018, then, in such event, the maturity of the incremental term loan facility will be accelerated from December 21, 2018 to January 15, 2018.

The following table summarizes certain key terms of our senior secured credit facility (in thousands):

	Credit Facility

	Revolving Facility			Term Loans			Incremental Term Loans
Final maturity date		10/26/2016			10/26/2017			12/21/2018
Available balance as of December 31, 2011		$40,000			$—			$—
Interest rates as of December 31, 2011:
Interest rate		0.30	%		0.26	%		1.25	%
Applicable margin		3.00	%		3.00	%		3.75	%

Total		3.30	%		3.26	%		5.00	%

2009 Senior Secured Credit Facility

Borrowings under our 2009 senior secured credit facility bore an interest rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, or (iii) the one-month LIBOR rate plus 1%. In addition, the rate we selected bore an applicable margin rate of 3.75% or 2.75% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility was subject to a commitment fee of 0.50% depending on our consolidated leverage ratio.

During the year ended December 31, 2011, we paid the remaining balance of $9.6 million on the term loans outstanding under the 2009 senior secured credit facility. Additionally, our available revolving credit commitments decreased from $76.1 million to $48.7 million, based on a computation of excess cash flow for the fiscal year ended December 31, 2010. As a result, we recorded a loss on extinguishment of debt of $0.2 million during the year ended December 31, 2011, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans. Additionally, during the year ended December 31, 2010, we used proceeds from the issuance of our Senior Notes to repay $148.9 million of principal on our revolving credit facility and $45.9 million of principal on our term loans, plus accrued interest, pursuant to the mandatory prepayment terms of the credit agreement governing the terms of our 2009 senior secured credit facility. As a result, during the year ended December 31, 2010, we recorded a loss on extinguishment of debt of $2.7 million, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans.

8³/8% Senior Notes

		8³/8% Senior Notes

Final maturity date		4/15/2018
Annual interest rate		8.375%
Payable semi-annually in arrears		April 15^th
		October 15^th

Our Senior Notes are unsecured but rank equally in right of payment with all senior secured indebtedness and senior to all subordinated indebtedness.

The indenture governing our Senior Notes contains covenants limiting our ability and the ability of our restricted subsidiaries to, among other things, incur certain additional indebtedness and issue preferred stock; make certain dividends, distributions, investments and other restricted payments; sell certain assets; agree to any restrictions on the ability of restricted subsidiaries to make payments to us; create certain liens; merge, consolidate or sell substantially all of our assets; and enter into certain transactions with affiliates. These covenants are subject to certain exceptions and qualifications. The indenture also has change of control provisions which may require our Company to purchase our Senior Notes at a price equal to 101% of the principal amount thereof, together with accrued and unpaid interest. Additionally, if we sell assets under certain circumstances, we will be required to make an offer to purchase our Senior Notes at their face amount, plus accrued and unpaid interest, if any, through the purchase date.

6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B

During the year ended December 31, 2011, we redeemed $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B. The redemption of these notes, at par, was funded in part by proceeds from the term loan, the revolving credit facility and cash on hand. As a result of this redemption, we recorded a loss on extinguishment of debt of $1.5 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations.

On December 21, 2011, we issued notices to redeem all of the remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date. We used proceeds from the incremental term loan under the new senior secured credit facility as described above, and cash on hand to fund the aggregate redemption price. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes. As of December 31, 2011, the $255.2 million irrevocable deposit was classified as restricted cash in our consolidated balance sheets, and $251.0 million of our Senior Subordinated Notes, net of a discount of $1.2 million, remained outstanding. The redemption was completed on January 20, 2012, and as of that date, there were no Senior Subordinated Notes outstanding. As a result of this redemption, we expect to record a loss on extinguishment of debt of $2.1 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations during the three months ended March 31, 2012.

Other Debt

During the year ended December 31, 2011, WBDT, a consolidated VIE, entered into a term loan with an unrelated third party in an original principal amount of $0.9 million to fund a portion of the purchase price for the acquisition of certain assets of WBDT-TV. This term loan matures in equal quarterly installments through May 2016. LIN Television fully and unconditionally guarantees this loan.

Repayment of Principal

The following table summarizes scheduled future principal repayments on our debt agreements (in thousands):

	Revolving Facility		Term Loans		Incremental Term Loans		8³/8% Senior Notes due 2018		Other Debt		Total

Final maturity date		10/26/2016		10/26/2017		12/21/2018		4/15/2018
2012⁽¹⁾	$	—	$	—	$	2,600	$	—	$	279	$	2,879
2013		—		6,250		2,600		—		241		9,091
2014		—		12,500		2,600		—		194		15,294
2015		—		18,750		2,600		—		184		21,534
2016 and thereafter		35,000		87,500		249,600		200,000		46		572,146

Total	$	35,000	$	125,000	$	260,000	$	200,000	$	944	$	620,944

⁽¹⁾: Excluded from the table above are principal payments of $252.2 million as a result of our irrevocable deposit with the trustee on December 21, 2011, to redeem in full all of our remaining Senior Subordinated Notes on January 20, 2012.

The fair values of our long-term debt are estimated based on quoted market prices for the same or similar issues, or based on the current rates offered to us for debt with the same remaining maturities. The carrying amounts and fair values of our long-term debt were as follows (in thousands):

	December 31,

	2011		2010
Carrying amount	$	868,717	$	623,260
Fair value	$	860,164	$	634,245

LIN Television Corporation

Long-term Debt

Note 7—Long-term Debt

Debt consisted of the following (in thousands):

	December 31,

	2011		2010
Senior Secured Credit Facility:
Revolving credit loans	$	35,000	$	—
$125,000 Term loans, net of discount of $604 as of December 31, 2011		124,396		—
$260,000 Incremental term loans, net of discount of $2,594 as of December 31, 2011		257,406		—
2009 Senior Secured Credit Facility:
Term loans		—		9,573
8³/8% Senior Notes due 2018		200,000		200,000
6¹/2% Senior Subordinated Notes due 2013		166,773		275,883
$85,426 and $141,316 6¹/2% Senior Subordinated Notes due 2013—Class B, net of discount of $1,228 and $3,512 as of December 31, 2011 and 2010, respectively		84,198		137,804
Other debt		944		—

Total debt		868,717		623,260
Less current portion		253,856		9,573

Total long-term debt	$	614,861	$	613,687

Senior Secured Credit Facility

The following table summarizes certain key terms of our senior secured credit facility (in thousands):

	Credit Facility

	Revolving Facility			Term Loans			Incremental Term Loans
Final maturity date		10/26/2016			10/26/2017			12/21/2018
Available balance as of December 31, 2011	$	40,000		$	—		$	—
Interest rates as of December 31, 2011:
Interest rate		0.30	%		0.26	%		1.25	%
Applicable margin		3.00	%		3.00	%		3.75	%

Total		3.30	%		3.26	%		5.00	%

2009 Senior Secured Credit Facility

8³/8% Senior Notes

		8³/8% Senior Notes

Final maturity date		4/15/2018
Annual interest rate		8.375%
Payable semi-annually in arrears		April 15^th
		October 15^th

Our Senior Notes are unsecured but rank equally in right of payment with all senior secured indebtedness and senior to all subordinated indebtedness.

6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B

Other Debt

Repayment of Principal

The following table summarizes scheduled future principal repayments on our debt agreements (in thousands):

	Revolving Facility		Term Loans		Incremental Term Loans		8³/8% Senior Notes due 2018		Other Debt		Total

Final maturity date		10/26/2016		10/26/2017		12/21/2018		4/15/2018
2012⁽¹⁾	$	—	$	—	$	2,600	$	—	$	279	$	2,879
2013		—		6,250		2,600		—		241		9,091
2014		—		12,500		2,600		—		194		15,294
2015		—		18,750		2,600		—		184		21,534
2016 and thereafter		35,000		87,500		249,600		200,000		46		572,146

Total	$	35,000	$	125,000	$	260,000	$	200,000	$	944	$	620,944

⁽¹⁾: Excluded from the table above are principal payments of $252.2 million as a result of our irrevocable deposit with the trustee on December 21, 2011, to redeem in full all of our remaining Senior Subordinated Notes on January 20, 2012.

	December 31,

	2011		2010
Carrying amount	$	868,717	$	623,260
Fair value	$	860,164	$	634,245

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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