iHeartCommunications gives new terms to restructure debt out of court

New York, Oct. 26 – iHeartCommunications, Inc. disclosed its latest proposal to its lender for an out-of-court restructuring of its debt in an 8-K filing with the Securities and Exchange Commission.

Under the terms of the offer, holders of the company’s term loans D and E and the priority guarantee notes would receive $7 billion of new first-lien debt with a maturity of five to seven years from the recapitalized company, 50% of the equity in the recapitalized company and 70% of iHeart’s ownership in CC Outdoor Holdings, Inc.

The restructuring proposal, made on Tuesday, would also include:

• iHeartCommunications’ receivables-based credit facility would remain outstanding or be refinanced at closing;

• Legacy notes would not participate in the exchange offer and the legacy notes would remain outstanding;

• The 10% notes due 2018, 14% notes due 2021 and existing iHeartMedia, Inc. equity holders would receive 50% of the equity in recapitalized iHeart, 30% of iHeart’s ownership in Outdoor and $300 million of new senior unsecured debt with a seven- to nine-year maturity; and

• A management incentive plan would be negotiated.

iHeart’s proposed restructuring was a counter-proposal to the lenders’ position. The lenders initially put forward a plan that would involve an out-of-court exchange with a stapled pre-packaged Chapter 11 filing.

Its terms are as follows:

• The term loans D and E and priority guarantee notes of iHeartCommunications would receive $6 billion of new secured term loans or notes due in five to seven years at recapitalized iHeart, an unspecified percentage of equity in recapitalized iHeart and potentially an unspecified percentage of equity in Outdoor;

• The legacy notes would receive an unspecified percentage of pro rata distributions of new debt and equity issued to holders of the term loans D and E and priority guarantee notes;

• The 10% senior notes due 2018 and 14% notes due 2021 would receive an unspecified percentage of equity and warrants in recapitalized iHeart and/or potentially in Outdoor;

• Existing iHeartMedia, Inc. equity holders would receive an unspecified percentage of equity and warrants in recapitalized iHeart and/or potentially in Outdoor;

• Management would receive a management incentive plan consistent with market practice;

• The distributions for the legacy notes, 10% senior notes due 2018 and 14% notes due 2021, iHeartMedia equity holders and management would not exceed $300 million.

No agreement has been reached, iHeartCommunications said, adding that any restructuring would also need the agreement from other debt holders.

The company has private exchange offers currently outstanding for its notes and term loans.

These offers began in December 2016 and have been extended multiple times.

iHeartCommunications is a subsidiary of iHeartMedia, Inc., a media and entertainment company based in San Antonio.

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