iHeartMedia buys $383 million of 10% notes, starts litigation

New York, Aug. 4 – iHeartMedia, Inc. said its Broader Media, LLC repurchased $383 million of the 10% senior notes due 2018 issued by iHeartCommunications, Inc. for $222.2 million on July 15.

iHeartCommunications through one or more of its subsidiaries plans further purchases of its debt, the company added in its 10-Q filing with the Securities and Exchange Commission.

The company also said it started new litigation on July 26 against some holders of its priority guarantee notes.

iHeartMedia is seeking a declaratory judgment that the indentures for its senior secured notes do not prevent Broader Media and other unrestricted subsidiaries from repurchasing iHeartCommunications’ debt and that the July 15 buyback did not violate the indentures. It is also seeking a declaratory judgment that there is no justification for new notices of default.

The litigation also seeks damages for what the company claims is “tortious interference, economic duress, civil conspiracy and breach of the covenant of good faith and fair dealing.”

Filed in the 224th judicial district in Bexar County, Texas, the legal action is against holders including Benefit Street Partners LLC, Canyon Capital Advisors LLC, D. E. Shaw Galvanic Portfolios, LLC, M.H. Davidson & Co., Davidson Kempner Partners, Davidson Kempner International, Ltd., Davidson Kempner Institutional Partners, LP, Islington Partner, LP, Bluejay Securities LLC, Franklin Mutual Advisers, LLC, Franklin Advisers, Inc., Taconic Opportunity Master Fund LP, Taconic Master Fund 1.5 LP, Watershed Capital Partners (Offshore) Master Fund, LP, Wingspan Investment Management, LP, OZ Management LP and OZ Management II LP, and the indenture trustees.

The holders previously issued a notice of default over a contribution on Dec. 3, 2015 of 100 million of class B common stock of Clear Channel Outdoor Holdings, Inc. to Broader Media from Clear Channel Holdings, Inc.

A trial from May 16 to May 20 resulted in a declaratory judgment and permanent injunction on May 24 that the company did not violate the indentures and that it was not in default.

iHeartMedia is a San Antonio-based operator of radio stations and digital media and out-of-home advertising company.

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