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Radio One in financing talks; bond payments blocked by lenders
By Caroline Salls
Pittsburgh, Aug. 17 - Radio One, Inc. is in talks with its lenders and the members of an informal committee of holders of its 8 7/8% and 6 3/8% senior subordinated notes to seek various financing alternatives in light of a payment blockage on the 6 3/8% notes and defaults on its senior credit facility, according to a company news release.
Under the payment blockage issued by the loan agent, Radio One and its guaranteeing subsidiaries cannot make any payment or distribution on the 2013 notes, including an interest payment due Aug. 15.
According to the release, the company was not in compliance with senior credit facility covenants that required it to maintain a total leverage ratio of 7.25 to 1.00 as of June 30.
Radio One said it also failed to maintain a total leverage ratio required as of July 1 as a result of a step down of the total leverage ratio to no more than 6.50 to 1.00 for the period of July 1 to Sept. 30, 2011 from 7.25 to 1.00.
In addition, the company said it secured an extension to its July 15 default forbearance agreement with lender agent Wells Fargo Bank, NA and the required lenders.
The forbearance is now scheduled to terminate on Sept. 10.
Also under the amended agreement, the agent and lenders have agreed not to act on an expected default that could be triggered by an Ernst & Young LLP opinion raising substantial doubt about Radio One's ability to continue as a going concern.
The agent and lender maintained their right to block payments on the company's 8 7/8% senior subordinated notes due 2011 and 6 3/8% senior subordinated notes due 2013.
Radio One is a Washington, D.C.-based broadcasting company.
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