The audio content creation and distribution company led by President/CEO David Field has once again entered into amendments that allows the publicly traded company more time to make interest payments associated with its credit facility without a fear of default.
They come with caveats — a sign that lenders may be demanding financial security guarantees from Audacy Inc.
According to an SEC filing made Monday (12/11), Audacy on Friday entered into “Amendment No. 12” to its Credit Facility Agreement agreed to on October 17, 2016.
This extends the grace period for payment to 68 calendar days. However, there is a caveat — if the lenders holding a majority of the outstanding obligations under the credit facility have not received a substantially final form of agreement with respect to a consensual transaction relating to Audacy’s funded indebtedness satisfactory to these “required lenders” by Friday (12/15), the grace period expires after 45 calendar days.
That’s noteworthy, as it suggests some lenders may be sending signs of wariness regarding Audacy’s finances, forcing them to pay soon, rather than later.
While 45 days versus 68 days may seen inconsequential, Audacy opted to collateralize its receivables. As such, shortening the grace period extension by 23 days is significant.
Subject to these grace periods are three series of interest payments:
- $17 million, originally due on October 31
- $785,592, originally due on November 8
- $1.125 million, which was scheduled for payment on December 28
With the credit facility extensions came another cross-default amendment tied to Audacy’s receivables. It extends “certain related covenant accommodations with respect to the company’s liquidity position” through January 7, 2024.
Then, there are “supplemental indentures.”
This saw Audacy on Friday extend the grace period before which a default occurs for not paying interest on its 2027 Notes from 40 calendar days to 67 days, and on its 2029 Notes from 71 calendar days to 99 calendar days.
There’s a caveat here, too: If the holders of a majority in the principal amount of the outstanding series of either notes haven’t received a “substantially final form of agreement” with respect to Audacy’s funded indebtedness by Friday, the 2027 Notes’ grace period is upped to just 44 calendar days, while the 2029 Notes get a slightly longer grace period extension to 76 calendar days.
If such an agreement isn’t executed and agreed upon with the majority lenders by December 18, the 2027 Notes’ grace period is 47 calendar days. The 2029 Notes’ grace period becomes 79 calendar days.
These variable grace periods are linked to interest payments of $15 million on the 2027 Notes, originally due November 1; and $18 million on the 2029 Notes, originally due September 30.
Thus, Audacy is racing against the clock to pay $50.79 million in overdue interest payments, with the principal amount on its debt untouched, in addition to $1.125 million that was to be paid later this month.
As of September 30, Audacy reported cash, cash equivalents and restricted cash of $57.38 million.
On word of the SEC filing, Audacy shares, which trade as an over-the-counter stock, fell by nearly 8%, to $0.1951.
Had a 1-for-30 reverse stock split never transpired, Audacy shares would be valued at $0.0065.
