Moody's Changes iHeartCommunications' Outlook To Negative From Stable

Concerns About Debt

YESTERDAY (NET NEWS 12/12), ALL ACCESS reported iHEARTMEDIA’s credit rating was cut by FITCH RATINGS on concern that the company’s debt could lead to a distressed exchange or bankruptcy. The report was critical, writing, "IHEARTMEDIA is burning cash." FITCH RATINGS dropped its rating to CC from CCC. FITCH added a restructuring “is likely within a year or two.”

TODAY, MOODY'S INVESTORS SERVICE changed iHEARTCOMMUNICATIONS' outlook to negative from stable, noting, "All the existing debt ratings including the Caa2 corporate family rating (CFR) and Caa3-PD probability of default rating are affirmed at current levels. The speculative grade liquidity rating was downgraded to SGL-4 from SGL-3."

MOODY'S added, "The change in outlook reflects the elevated possibility that the company will restructure its debt over the next year. iHEART recently attempted to obtain consent solicitations that would make it easier for iHEART to restructure its debt, from five different classes of priority guarantee notes (PGN) which was not successful, and from its 2021 senior note which was approved by note holders. MOODY'S would likely consider an exchange of the company's existing debt for another security as a distressed exchange and categorize it as a Limited Default. The outlook also reflects the negative impact that the current strength of the US$ would have on its financial performance in the near term and the company's largely US$ denominated debt structure."

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