Updated at 5:40pm Eastern
Entercom Communications, which this week expanded its holdings in the podcast space and amended its October 2016 credit agreement with JPMorgan Chase Bank, has announced that it priced $540 million in aggregate principal amount of 6.750% senior secured second-lien notes due in eight years.
It also quietly disclosed to the SEC on Wednesday that one of its board members will not stand for reelection.
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Entercom Media Corp., a subsidiary created by Philadelphia-based Entercom, is the issuer. And, it says it expects to use the net proceeds from this offering, due in 2029, to redeem all of its 7.25% senior notes due 2024 and to partially repay existing indebtedness under the company’s senior credit facilities.
Thus, it is a new debt for old debt swap, with the notes “fully and unconditionally guaranteed on a senior secured second-lien basis.”
The notes will be offered privately, Entercom says, to qualified institutional buyers.
The size of the offering was increased from $500 million in aggregate principal amount of the notes, as RBR+TVBR reported early Thursday (3/10). The sale of the motes is expected to close on March 25, subject to customary closing conditions.
Entercom shares have enjoyed strong growth over the last six months and open Thursday’s trading at $5.84. They finished the day at $6.20, up 6.2%, and are now at their highest value since April 2019.
It’s a far cry from March 9, 2020, when shares were at $2.35 just days before ETM was to see its last ex-dividend payment to shareholders. Entercom stock then slid to $0.83 as March 2020 came to a close, with much pandemic uncertainty crippling ad sales for broadcast media.
Much of Entercom’s stock growth, however, has come in Q1. On December 28, 2020, ETM was at $2.47, with little signs of a jump past $3.
BOARD EXIT FOR SELIG
With an SEC filing reflecting the half billion-dollar note offering pending, Entercom on Wednesday disclosed that on March 9, Stefan Selig provided notice to Entercom that he will not stand for reelection at the 2021 Annual Meeting of Shareholders.
However, Selig will continue to serve on the company’s Board of Directors until the 2021 Annual Meeting of Shareholders, when his current term will expire.
Entercom made it clear that Selig’s decision is not the result of any disagreement relating to the company’s operations, policies or practices.
Selig is an accomplished banker who in 2017 founded Bridgepark Advisors LLC, a firm devoted to providing “personalized strategic advice on a broad range of critical business and financial issues and transaction execution to a select group of CEOs, boards of directors, and institutional and high net worth investors.”
But, if his name is familiar for another reason, it is because Selig served as President Obama’s Under Secretary of Commerce for International Trade at the U.S. Department of Commerce from 2014-2016. As one of the nation’s most senior commercial diplomats, Selig headed the International Trade Administration.
Before joining the Obama administration, Selig spent 15 years at Bank of America Merrill Lynch, exiting as Exec. Vice Chairman of Global Corporate & Investment Banking.
In light of this development, the Entercom Board, by unanimous written consent on Wednesday, withdrew Selig’s nomination and reduced the size of the board from eleven to ten persons, effective as of the 2021 Annual Meeting of Shareholders.
The directorship being eliminated is in Board Class I such that, effective as of the 2021 Annual Meeting of Shareholders, Board Class I will consist of three directors (including one Class A Director).
Stefan Selig also serves as lead director of Safehold Inc., which acquires, owns, manages and capitalizes ground net leases.
