| April 21
April 21 A group of iHeartMedia Inc
lenders has signed a cooperation agreement to oppose the debt
overhaul of the largest owner of U.S. radio stations, presenting
a threat to the company's bid to avoid bankruptcy, people
familiar with the matter said.
The move shows how iHeartMedia, which says it has more than
a quarter of a billion monthly radio listeners in the United
States, is struggling to find a solution that would
significantly slash its $20 billion debt pile outside of
iHeartMedia needs more than 50 percent of the holders of its
term loans to approve a debt swap for it to complete its
proposed overhaul. iHeartMedia has already pushed back the
deadline for its loan swap offer twice, and sweetened it once
before. The latest deadline expires later on Friday.
The creditors who signed the pact told iHeartMedia they
represent more than half of the term loans holders, and are
seeking to put pressure on the company to either significantly
improve on its loan swap offer, or propose a new way to tackle
the debt altogether, the sources said this week.
The sources asked not to be identified because the
deliberations are confidential. iHeartMedia declined to comment.
"Bondholders and creditors don't feel they've been offered
enough," said Anthony Canale, head of high yield research at
research firm Covenant Review. "The company's behavior has been
extremely aggressive, and may have resulted in some hurt
feelings and emotions that may be further complicating this."
iHeartMedia in March launched a pair of debt exchanges to
cut its debt, with one swap targeting a series of bonds and the
other swap focusing on term loans. Getting a deal on the term
loan swap is a precondition for clinching any swap for the
The company could again extend the deadline for the term
loan swap and sweeten terms for the lenders in the hope of
garnering more support, as it has done before.
Credit ratings agency Fitch Ratings estimates that full
participation in the loan and bond swaps would cut the company's
debt pile by up to $4.3 billion.
iHeartMedia said on Thursday that it anticipates it will
disclose "substantial doubt" in its next quarterly earnings
report about its ability to continue as a going concern, because
of its debt maturities and uncertainties around the swaps.
Buyout firms Bain Capital LLC and Thomas H. Lee Partners LP
acquired iHeartMedia in 2008 for $24 billion.
(Reporting by Jessica DiNapoli in New York; Editing by Phil