iHeartMedia won’t repay $57.1 million of Clear Channel legacy notes

By Caroline Salls

Pittsburgh, Dec. 13 – iHeartMedia, Inc. will not repay the $57.1 million of 5½% senior notes held by its Clear Channel Holdings, Inc. affiliate when they mature on Dec. 15, according to an iHeartMedia news release.

The company said the decision not to repay the notes was made by a special committee of independent directors as part of iHeartMedia’s ongoing efforts to address its capital structure while maximizing the value of its assets.

While the $192.9 million of 2016 legacy notes held by other holders will be paid in full at maturity, the company said the $57.1 million balance held by Clear Channel will remain outstanding.

As a result, iHeartMedia said it will continue to have at least $500 million of legacy notes outstanding on Dec. 15 and will therefore not be obligated to grant additional security interests in favor of some of its debtholders under a so-called “springing lien.”

In addition, iHeartMedia and some of its affiliates filed lawsuits Monday in the State District Court in Bexar County, Texas, seeking a declaration that the $57.1 million of 2016 legacy notes remains outstanding and that the company is not currently obligated to grant any of its debtholders the “springing lien” on any of its assets.

As it continues to work toward a comprehensive plan to achieve an optimal capital structure, the company said it intends to take any other actions necessary to protect iHeartMedia and position it for long-term growth and success.

According to an 8-K filed with the Securities and Exchange Commission, iHeartMedia’s board of directors adopted resolutions authorizing a fourth amended and restated certificate of incorporation, and the new charter was approved by the company’s stockholders on Monday.

The company said the new charter authorizes the issuance of 200 million shares of a new class of non-voting class D common stock, par value $0.001 per share, as well as the issuance of 150 million shares of “blank check” preferred stock, par value $0.001 per share.

The new charter will become effective upon its filing with the Secretary of State of the State of Delaware, which is expected to occur on the 20th calendar day following the mailing of an information statement to company stockholders.

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

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