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(Bloomberg) — Banks led by Bank of America Corp. have launched a $2.75 billion leveraged loan to help fund Nexstar Media Group Inc.’s pending acquisition of rival TV-station owner Tegna Inc, putting investor appetite to the test in a slumping US loan market.
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The loan is being pitched at a margin of as much as three percentage points above benchmark and a discounted price of 99 cents on the dollar, according to a person familiar with the matter. Investor commitments are due March 18, the person added, asking not to be identified because details are not public.
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Lenders had committed to provide as much as $5.73 billion of debt financing to support the acquisition, refinance some Tegna obligations and related transactions, according to a Nexstar filing.
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The offering comes at a time when the leveraged loan market is grappling with AI-driven disruption fears and an escalating conflict in the Middle East, prompting fund managers to trim exposure to riskier debt and pushing up the cost of new financings.
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Signs of strain among borrowers are mounting. Last week, C&D Technologies Inc, Herbalife Ltd. and AMC Entertainment Holdings Inc. shelved loan offerings, while Consolidated Energy Ltd. and Arclin Inc. priced deals at steep discounts.
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Nexstar’s proposed purchase of Tegna was announced in August, and without divestitures would create a company whose stations would reach 80% of US TV households. The deal requires US government approval, and the companies have targeted to close the combination by the second half of 2026.
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It’s among several deals that are set to alter America’s media landscape. Paramount Skydance Corp. — itself the creation of a recent combination — last month agreed to pay $111 billion for Warner Bros. Discovery Inc.
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(Updates with leveraged loan market context starting in fourth paragraph)
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