Moody’s: iHeart debt exchange is distressed

Moody's Investors Service said it considers iHeartCommunications, Inc.'s (iHeart) debt exchange of $476 million of senior unsecured notes due 2018 for a like amount of senior secured priority guarantee note due 2021 to be a distressed exchange.

The agency affirmed the Caa2 corporate family rating and the Caa3-PD/LD probability of default rating (with the /LD suffix added for one day).

The newly issued 11¼% priority guarantee note due 2021 (which will be issued as additional notes under the existing 11¼% priority guarantee note indenture) was assigned a Caa1 (LGD2).

The outlook remains negative.

Moody's assessed the transaction as comprising a distressed exchange (DE) and a default due, in part, to the extension of the maturity date beyond its initial terms and the company's very high leverage levels. Accordingly, the agency said it appended the /LD limited default indicator to iHeart's probability of default rating; this will remain for one business day.

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