It was no doubt a year that CEO Alfred Liggins would like to forget – or better yet, never have experienced – as Radio One saw what at first seemed to be a routine refinancing stretch on for more than six months. The good news was that it finally got done.
The refi from hell began in June, when Radio One announced a multi-layered refinancing deal to cover just about all of its existing debt and also allow the company to increase its equity stake in TV One, the cable channel it owns with Comcast and three private equity firms. Complicated, yes, but nothing out of the ordinary.
The planned refi included an exchange offer for the company’s existing bonds due in 2011 and 2013 for new ones due in 2013, along with the sale of up to $100 million of new bonds to the existing holders to finance the TV One investment. An overwhelming majority of the bondholders had signed on to support the deal, but there were conditions to be met before closing.
Getting all of the terms negotiated with its senior lenders and the bondholders turned into a nightmare and the TV One investment had to be put aside for the time being. As negotiations dragged on, Radio One fell into technical default on the 2013 bonds. It was also operating under a forbearance agreement with the senior lenders.
It was clear though that no one wanted to pull the trigger and take action on the default. Rather, the negotiations continued and Radio One reported on more than one occasion that progress was being made.
Finally, in early November a deal was struck that satisfied all of the parties. The long-pending exchange offer went to closing before Thanksgiving and Liggins is probably finding it easier to sleep at night.