Cumulus credit facility amendment changes pricing, cuts revolver size

By Sara Rosenberg

New York, June 30 - Cumulus Media Inc.'s credit facility amendment revised term loan and revolver pricing to Libor plus 400 basis points and reduced the revolver size to $20 million from $100 million, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Once the term loan is reduced by $25 million through mandatory prepayments of excess cash flow, pricing will step down to Libor plus 375 bps, and it will step down again to Libor plus 325 bps once the term loan is reduced by $50 million through mandatory prepayments of excess cash flow.

The company will be required to make quarterly mandatory prepayments of 100% of excess cash flow beginning with the fiscal quarter ending Sept. 30 and continuing through Dec. 31, 2010, before reverting to annual prepayments of a percentage of excess cash flow, depending on leverage.

In addition, the amendment removed the allowance for incremental facilities.

Also, the total leverage and fixed-charge coverage ratios were suspended for the fiscal quarters ending June 30 through and including Dec. 31, 2010.

During the covenant suspension period, the company must maintain minimum trailing 12-month consolidated EBITDA of $60 million for fiscal quarters ended June 30 through March 31, 2010, increasing incrementally to $66 million for fiscal quarter ended Dec. 31, 2010, and maintain minimum cash on hand of at least $7.5 million.

Furthermore, the company is restricted from incurring additional intercompany debt or making any intercompany investments, and the company may not incur additional debt or liens, or make permitted acquisitions or restricted payments, during the covenant suspension period.

Lastly, the company must provide monthly unaudited financial statements to the lenders within 30 days after each calendar-month end.

Consenting lenders received warrants exercisable for 1.25 million class A shares.

In connection with the amendment, Cumulus voluntarily prepaid $32.5 million of the term loan, reducing outstanding borrowings on the facility to $647.9 million.

The amendment was completed on June 29.

Bank of America is the administrative agent on the deal. Citadel Securities, a division of Citadel Derivatives Group LLC, advised the company.

Cumulus is an Atlanta-based radio broadcaster.

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