In two years, a $1.8 billion term loan is due for the nation’s No. 1 owner of radio stations and the top audio content creator and distributor. With shares tumbling over the last month to under $1 in value, there’s chatter in financial circles that some iHeartMedia creditors have retained financial and legal advisers over concerns the company’s revenue declines may give the Bob Pittman and Rich Bressler-led organization no other choice but a debt restructuring.
According to Bloomberg News, Pacific Investment Management Co. (PIMCO) is among the creditors to engage with advisers. And, according to “people with knowledge of the matter” who requested anonymity, 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.
At present, 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.
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.
