Entercom Amends Its Credit Agreement

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Entercom Communications has entered into an agreement to amend the financial covenants and other provisions under its credit agreement, “solely for the benefit of its revolver lenders,” the audio media company announced following Monday’s Closing Bell on Wall Street.


During the covenant relief period, which extends through December 31, 2021 (unless terminated earlier by Entercom) the amendment provides for a “covenant holiday” for the third and fourth quarters of 2020.

It also recommences covenant testing beginning March 31, 2021, the start of fiscal Q2 2021, and modifies the definition of Consolidated EBITDA by setting fixed amounts for the second, third and fourth quarters of 2020.

These fixed amounts are the amounts previously reported by Entercom to its lenders for the second, third and fourth quarters of 2019, respectively.

Further, the amendment increases the interest rate applicable to the 2024 Revolving Credit Loans by 25 basis points, and adds a new minimum liquidity covenant of $75 million.

Further, it limits Entercom’s ability to issue additional first lien debt to $200 million while imposing other restrictions, including certain limitations on making restricted payments, redeeming notes and entering into certain sale and lease-back transactions.

The amendment also provides that these amendment provisions fall away at the end of the covenant relief period (e.g., the interest rate applicable to the 2024 Revolving Credit Loans reverts back to the prior applicable margin).

Entercom President/CEO David Field was pleased to announce the credit facility amendment, which addresses “the significant impact that COVID-19 has had on the economy and our advertising revenues.”

He added that Entercom ended Q2 2020 “in a strong liquidity position with $208 million of cash on-hand, up from $189 million at the end of March.”

The news helped ETM recover 10 cents from an 11-cent dip on Monday, bringing Entercom shares to $1.49 in early after-hours trading.