Report Details iHeartMedia's Plan To Retire Some Bonds, Swap Debt For Short-Term Relief
February 4, 2016 at 3:59 AM (PT)
BLOOMBERG is reporting that iHEARTMEDIA, INC., facing $20.6 billion in debt, is considering a plan to sell bonds or equity to retire $1.4 billion in bonds and give existing debtholders the option to swap present debt for new obligations from a new iHEART subsidiary, BROADER MEDIA LLC. iHEART has been moving assets, including $516 million in CLEAR CHANNEL OUTDOOR HOLDINGS stock and dividends from the proceeds of the sale of CLEAR CHANNEL INTERNATIONAL BV notes, into BROADER MEDIA since DECEMBER; the move would also put creditors in a higher-ranked position on some of their claims against iHEART assets.
An alternative being considered would be to sell securities in BROADER MEDIA and use the proceeds to buy back iHEART bonds in the open market. Either method would, if successful, buy more time for iHEART to address the larger, longer-term debt coming due in 2019, and would require creditors to accept the short-term plans rather than press for a more immediate solution and the present priority rankings for being paid.
Spokepersons for iHEART and owners BAIN CAPITAL and THOMAS H. LEE PARTNERS declined to comment on the report.
The bond retirement plan is designed to clear out debts due before 2019, which is when $8.3 billion in senior debt will come due; under the plan, iHEART would be retiring $192.9 million in 5.5% unsecured notes due DECEMBER 2016, $190 million in a revolving loan due DECEMBER 2017, $850 million in 10% unsecured notes due JANUARY 2018, and $175 million in 6.875% unsecured notes due JUNE 2018.