Citadel, Lenders Amend Debt Terms
April 1, 2009 at 5:09 AM (PT)
CITADEL BROADCASTING has disclosed in an FCC filing that it has reached agreement with several lenders to amend various terms of its Senior Credit and Term Facility, including suspending certain financial covenants through 2009 while imposing new monthly covenants for the year. The company told the SEC that it "expects to be in compliance with the modified terms of the Senior Credit and Term Facility through 2009."
Among other changes, CITADEL will be required to have at least $150 million of available cash as of JANUARY 15th, 2010 and remaining convertible subordinated notes must be amended by the same date to provide for a maturity date on or after SEPTEMBER 30, 2014. The company will also be required to maintain 7.75-to-1 leverage through JUNE 30th, 2010, reducing to 7.25-to-1 on JUNE 30th, 2010 and 6.75-to-1 on DECEMBER 31, 2010, and if the company's cash exceeds $30 million at any time, the excess must be placed into a cash collateral account for the lenders.
CITADEL owed $2.01 billion under the facility at the end of 2008 and had been in compliance with the covenants at that time, but, it reported, "the expected continuing decline in radio revenues in the first half of 2009 and the projected decline in operating profits created uncertainty regarding the Company's ability to continue to comply with its debt covenants through 2009."
The company said that "based on the current economic and capital markets and the continuing decline in radio revenues, it will be difficult for the Company to meet these requirements in 2010, especially those commencing on JANUARY 15th, 2010."