SFX Entertainment begins consent solicitation to amend 9 5/8% notes

By Toni Weeks

San Luis Obispo, Calif., Aug. 19 – SFX Entertainment, Inc. announced it began a consent solicitation for a proposed amendment to the terms of its outstanding 9 5/8% second-lien senior secured notes due 2019.

According to an 8-K filing with the Securities and Exchange Commission, the proposed amendment would, among other things, amend the calculation of “consolidated EBITDA” to include incremental contributions from (a) certain marketing agreements entered into after the period for which the calculation is being made and before the relevant date of determination and (b) reimbursements the company expects to receive from Management Vennootschap BVBA related to start-up investments made in connection with a live event.

The company believes that it will recoup $7.7 million from Management Vennootschap in connection with the live event. It also believes, due to multiple qualified marketing agreements made during or after the fiscal quarter ended June 30, that it is eligible to make a roughly $54 million contribution to consolidated EBITDA.

Holders of record as of 5 p.m. ET on Aug. 18 are entitled to participate in the consent solicitation, which will expire at 5 p.m. ET on Aug. 29.

SFX will pay to each holder who delivers a valid consent prior to the expiration date a cash consent payment of $2.50 per $1,000 principal amount of securities.

The consent payment is conditioned on, among other things, the receipt of consents representing a majority in principal amount of the outstanding securities as of the record date. The consent fee will be paid “promptly” following the expiration time.

Consents may be revoked at any time prior to the time at which the amendment becomes effective.

SFX also announced on Tuesday that it intends to issue more of the existing 9 5/8% notes, which will constitute additional notes under the indenture.

Barclays Capital, Inc. (800 438-3242 or 212 528-7581) is the solicitation agent. MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) is the tabulation and information agent.

New York-based SFX is a producer of live events and digital entertainment content focused on electronic music culture and other world-class festivals.

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