According to “people familiar with the situation” who spoke with a Bloomberg News reporter known for her prior work covering restructuring talks for Debtwire, iHeartMedia has started confidential conversations with a collection of debtholders led by Pacific Investment Management Co. (PIMCO).
This signals new efforts first discussed in late May by the nation’s No. 1 owner of radio stations and a leading podcast hub to further tackle its billions of dollars in debt.
Reshmi Basu of Bloomberg News reported late Wednesday that private discussions have begun. But, there’s little else being shared — although such talks largely can involve a debt-restructuring plan that would be extended to other debtholders should PIMCO’s group give its approval.
For the team led by CEO Bob Pittman and COO/CFO Rich Bressler, the pressure is on to deal with a May 2026 term loan repayment deadline.
That term loan is valued at $1.8 billion, and as RBR+TVBR first reported on May 31, strong chatter in financial circles circulated by Bloomberg News suggested that various iHeartMedia creditors had retained financial and legal advisers over concerns the company’s revenue declines may give the publicly traded audio content creation and distribution company no other choice but a debt restructuring.
PIMCO was said to be among the creditors to engage with advisers some eight weeks ago.
Additionally, “people with knowledge of the matter” who requested anonymity shared with Bloomberg News that iHeartMedia lenders are working with Evercore, the financial advisor, and Milbank LLP, whose practice areas include securities, tax, trusts and estates, financial restructuring, and corporate law. Bloomberg News says their holdings are weighted toward term loan debt that comes due in 2026.
As of May 31, iHeartMedia’s debt stands at $5.2 billion. Of that, there’s not only the term loan due in 2026 but also an $800 million 6.375% note that matures that year.
With the Bloomberg News story’s publication, shares of “IHRT,” which trades on the Nasdaq GlobalSelect market, declined by 7.3% to $1.65, ending a healthy rally seen by the issue in recent weeks.
The second quarter earnings report from iHeartMedia is due on August 8, and a significant tightening of the company’s loss is anticipated, with earnings per share predicted to come in between -$0.34 and -$0.29, five analysts tell Yahoo! Finance. This compares to a Q2 2023 EPS loss of -$5.93. The revenue in Q2 is forecast to come in between $908.18 million and $920 million, the five analysts share. That’s 1.1% sales growth, if correct.
It was in January 2019 when iHeartMedia received approval from a federal bankruptcy court in Texas of its plan to emerge from Chapter 11 bankruptcy protection. With the bankruptcy case confirmed by the court, ownership of iHeartMedia became held by Franklin Advisors and PIMCO. These firms represent the major bondholders, and combined they represented 25% of ownership interest, as of January 2019.
Also in the mix: Davidson Kempner Capital Management LP, a global institutional investment management firm.
An iHeartMedia spokesperson did not immediately respond to RBR+TVBR‘s request for comment on the Bloomberg News report.
