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Bankruptcy Petitions Filed By iHeart.

With a SEC filing due on Thursday morning, iHeartMedia shared via its investor relations section on its corporate website in the wee hours of The Ides of March news that has been eagerly anticipated for nearly two weeks. The nation's No. 1 radio broadcasting company has filed for Chapter 11 reorganization, doing so in a Texas federal bankruptcy court.

As first reported by Streamline Publishing'sRadio INKin the 3am Eastern hour, voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code were filed in the U.S. Bankruptcy Court for the Southern District of Texas' Houston division.

This reflects iHeart's historical link to San Antonio, where the company was founded by L. Lowry Mays as Clear Channel Communications.

What does this mean for iHeart's day-to-day operations? It is business as usual, and the company will operate their businesses as "debtors-in-possession" under court jurisdiction.

Importantly, Chapter 11 cases have not been filed with Clear Channel Outdoor Holdings , which is traded separately on the New York Stock Exchange.

Proposed execution versions of the restructuringsupport agreement and related restructuring term sheet reflecting an agreement in principle between iHeartMedia and holders of more than $10 billion of itsoutstanding debt as well as its equity holders.

"iHeartMedia expects to be able to enter into the restructuring support agreement in short order. However, there can be no assurances that the restructuring support agreement will be entered into or that it will be entered into in the form of, or with the terms set forth" in the two exhibits incorporated in today's SEC filing.

As iHeart is seeking bankruptcy protection, it disclosed "certain information" regarding its preliminary full-year 2017 financial results. But, iHeart warns, they "are subject to the completion of iHeartMedia's financial closing procedures" for FY2017. "The preliminary financial results have been prepared by and are the responsibility of iHeartMedia's management.iHeartMedia's independent registered public accounting firm, Ernst & Young LLP, has not audited or reviewed, and does not express an opinion with respect

to this information."

DEFAULTS TRIGGERED WITH CHAPTER 11 FILING

The filing of the bankruptcy petitions constitutes an event of default that accelerated iHeartCommunications' obligations under the following series of debt instruments:

Senior Indenture, dated as of October 1, 1997 (as amended or supplemented from time to time), by and between iHeartCommunications and The Bank of New York (now known as The Bank of New York Mellon), as trustee, governing iHeartCommunications' 5.50% Senior Notes due 2016, 6.875% Senior Notes due 2018 and 7.25% Senior Notes due 2027

Credit Agreement, dated as of May 13, 2008, as amended and restated as of February 23, 2011 (as further amended or supplemented from time to time),by and among iHeartCommunications, as the parent borrower, the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto,iHeartMedia Capital I, LLC, as a guarantor, Citibank, N.A., as administrative agent, swing line lender and letter of credit issuer, and the other the lenders from time to time party thereto governing iHeartCommunications' Term Loan D and Term Loan E facilities

Indenture, dated as of February 23, 2011 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, Wilmington Trust FSB, as trustee (with Wilmington Trust, National Association as successor in interest), and Deutsche Bank Trust Company Americas, as collateral agent, paying agent, registrar, authentication agent and transfer agent, governing iHeartCommunications' 9.0% Priority Guarantee Notes due 2021

Indenture, dated as of June 21, 2013 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I LLC, as guarantor, the other guarantors party thereto, Law Debenture Trust Company of New York, as trustee (with Delaware Trust Company as successor trustee), and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent, governing iHeartCommunications' 14.00% Senior Notes due 2021

Indenture, dated as of February 28, 2013 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar, authentication agent and transfer agent (with UMB Bank National Association as successor trustee, paying agent, registrar, authentication agent and transfer agent), and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications' 11.25% Priority Guarantee Notes due 2021

Indenture, dated as of October 25, 2012 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent (with Wilmington Trust, National Association as successor trustee, paying agent, registrar and transfer agent), and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications' 9.0% Priority Guarantee Notes due 2019

Indenture, dated as of September 10, 2014 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar, authentication agent and transfer agent (with Wilmington Trust, National Association as successor trustee, paying agent, registrar, authentication agent and transfer agent), and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications' 9.0% Priority Guarantee Notes due 2022

Indenture, dated as of February 26, 2015 (as amended or supplemented from time to time), by and among iHeartCommunications, iHeartMedia Capital I, LLC, as guarantor, the other guarantors party thereto, U.S. Bank National Association, as trustee, paying agent, registrar, authentication agent and transfer agent, and Deutsche Bank Trust Company Americas, as collateral agent, governing iHeartCommunications' 10.625% Priority Guarantee Notes due 2023

Credit Agreement, dated as of November 30, 2017, by and among iHeartCommunications, as the parent borrower, iHeartMedia Capital I, LLC, as a guarantor, the subsidiary borrowers party thereto, TPG Specialty Lending, Inc., as administrative agent, sole lead arranger and a lender, the other lenders, swing line lenders and letter of credit issuers from time to time party thereto and the other syndication agents party thereto, governing iHeartCommunications' asset-based term loan and revolving credit facility

Revolving Promissory Note, dated November 10, 2005, as amended by the first amendment entered into on December 23, 2009, the second amendment entered into on October 23, 2013, and the third amendment entered into on November 29, 2017, between iHeartCommunications, as maker, and Clear Channel Outdoor Holdings, Inc., as payee.

Will iHeart need to make its obligations to these debt instruments?

As a result of the bankruptcy petitions the principal and interest due thereunder "shall be immediately due andpayable." But, "any efforts to enforce the payment obligations under the Debt Instruments are automatically stayed as a result of the Bankruptcy Petitions, and thecreditors' rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code."

With the filing of the bankruptcy petitions with the Texas federal district court, its Exchange Offers -- introduced exactly one year that would have swapped new debt for old debt -- have been terminated.

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Publication:Radio and Television Business Report (RBR+TVBR)
Geographic Code:1U7TX
Date:Mar 15, 2018
Words:1181
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