As Expected, iHeart Taps Bondholders

By on Nov, 28 2016 with Comments 0

The nation’s biggest owner of radio stations in the U.S. is moving forward with a plan to amend each of the legal, binding contracts governing its Senior Notes due 2021 and five series of priority guarantee notes in a move designed to give it a little more than $4 million in additional cash.

In an announcement made early Monday (11/28), iHeartCommunications said it has commenced six separate consent solicitations, each seeking bondholder approval of proposed amendments to each of the indentures governing the notes.

The proposal would see the Aggregate Fixed Consideration Amount shift to a higher Aggregate Contingent
Consideration Amount 
for each of the following:

  • 9.0% Priority Guarantee Notes due 2019 — $1,999,815 to $2,999,723
  • 9.0% Priority Guarantee Notes due 2021 — $1,750,000 to $2,625,000
  • 11.25% Priority Guarantee Notes due 2021 — $575,000 to $862,500
  • 9.0% Priority Guarantee Notes due 2022 — $1,000,000 to $1,500,000
  • 10.625% Priority Guarantee Notes due 2023 — $950,000 to $1,425,000
  • Senior Notes due 2021 (184502BQ4, 184502BP6, U18285AK9) — $1,729,168 to $2,593,752

The proposed amendment also allows iHeart to exclude any bondholders who are not “U.S. persons” or institutional “accredited investors.”

Each of the six Consent Solicitations are to expire at 5:00 p.m. Eastern on Dec. 7, unless extended or terminated at an earlier date.

Moelis & Company LLC is acting as the solicitation agent for the Consent Solicitations.

Global Bondholder Services Corp. is acting as the tabulation agent and information agent for the Consent Solicitations.

The Consent Solicitations come following the early October bondholder approval of iHeart’s right to extend its outstanding debt by a half-billion dollars, should it elect to do so.

To accomplish this task, the company agreed to pay a $8.6 million consent fee to the bondholders.

The company’s plan to gain the ability to extend its debt was first presented to bondholders on Sept. 27. Specifically, holders of iHeart’s outstanding Senior Notes due 2021 approved a proposed amendment that would increase the aggregate principal amount of indebtedness under iHeart’s credit facilities to exactly $17,270,638,000.

Investors seem to approve of the proposal to iHeart bondholders: In morning trading shares of IHRT were up nearly 3.6%, to $1.46, on slightly higher than average volume of 11,940 shares.

About The Author: Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.

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