Report: Group Of iHeartMedia Lenders Has Agreed To Oppose Company's Debt Restructuring

Trouble Ahead?

REUTERS is reporting that a group of iHEARTMEDIA's lenders has agreed to oppose the broadcaster's debt restructuring bid.  

REUTERS' sources say that the creditors represent over half of the holders of the present term loans and want the company to either improve the debt swap offer on the table now or come up with an entirely new plan. iHEARTMEDIA's present plan is a pair of debt swaps that would extend the maturity of iHEART's $20 billion debt further into the future and cut the overall debt by up to $4.3 billion, but the lenders have thus far mostly declined to agree to the proposals. The deadline for tendering for the swaps is currently the end of business TODAY, the result of two earlier extensions.

COVENANT REVIEW Head of High Yield Research ANTHONY CANALE told REUTERS that the lenders don't think the offers in the current proposal are high enough and called iHEARTMEDIA's behavior "extremely aggressive, and may have resulted in some hurt feelings and emotions that may be further complicating this."

In a preliminary statement of financial results for first quarter (NET NEWS 4/20), iHEARTMEDIA indicated that it "will continue to incur net losses and generate negative cash flows from operating activities given iHEARTCOMMUNICATIONS’ indebtedness and related interest expense," and said that its final financial statement for first quarter will "include disclosure indicating there will be substantial doubt as to our ability to continue as a going concern for a period of 12 months following the date the first quarter 2017 financial statements are issued as a result of uncertainty around our ability to refinance or extend the maturity of our receivables based credit facility, to achieve our forecasted results, and to achieve sufficient cash interest savings from the pending Exchange Offers and Term Loan Offers."

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