Some 92% of Urban One‘s bondholders, representing $450 million in debt, submitted their notes before the December 1 early tender deadline as the company superserving African American consumers advances a three-part refinancing strategy.
The robust early results from the company’s debt restructuring plan, revealed in November, follows a series of similar debt exchanges across the radio industry as companies work to refinance under higher interest rates.
Peers iHeartMedia, Cumulus Media, and Beasley Media Group all executed comparable exchanges in 2024, each also securing participation rates above 90%.
The Urban One plan includes exchanging existing 7.375% Senior Secured Notes due 2028 for new 7.625% Second Lien Senior Secured Notes maturing in 2031 with a small cash component, repurchasing up to $185 million in notes for $111 million in cash, and issuing $60.6 million in new 10.5% First Lien Senior Secured Notes due 2030. Together, the measures are designed to reduce Urban One’s near-term debt burden and extend maturities.
The cash buyback portion drew strong participation, with $449.5 million in notes submitted; more than double the $185 million cap. As a result, tenders in the cash offer will be accepted on a prorated basis. An additional $480,000 in notes were submitted for the exchange-only option.
Bondholders also approved amendments to the 2028 note indenture that will take effect once the transaction closes. The changes remove most restrictive covenants, modify merger and consolidation provisions, and release existing guarantees and liens, allowing Urban One greater flexibility in future financing and operational decisions.
A group of supporting noteholders has agreed to backstop the full $60.6 million issuance of new first-lien bonds. Other investors subscribed to approximately $4.7 million, with the remaining $55.9 million expected to be purchased by the backstop group.
Urban One expects to complete the restructuring by December 15, unless extended or terminated. Moelis & Company is serving as dealer manager and solicitation agent, and D.F. King & Co. is acting as exchange and information agent.
The refinancing comes as Urban One shares finished Monday’s trading on the Nasdaq market at $1.23, a value that represents a nearly 22% year-to-date decline in value following a late July peak at $1.90.
Of the institutional investors with holdings in Urban One, Zazove Associates LLC is the largest, with some 7.5% equity interest in the company founded by Cathy Hughes and run today by her son, Alfred Liggins III.
— Additional reporting by Adam R Jacobson
