It’s the same old song, but with the same exact meaning since you’ve been gone.
To the surprise of no one, iHeartMedia on Thursday yet again extended the deadline for participation in its term loan offers and exchange offers crafted on March 15, 2017.
The new deadline — pending the next extension and any and all subsequent extensions — is 5pm Eastern on Friday, Jan. 19.
The Exchange Offers and Consent Solicitations were previously scheduled to expire Friday (1/5) at 5pm Eastern.
As of 5pm Eastern on Wednesday (1/3), an aggregate amount of approximately $34 million of Existing Notes, representing approximately 0.4% of outstanding Existing Notes, had been tendered into the Exchange Offers.
That represents just a slim increase from Sept. 27, when an aggregate amount of approximately $31.4 million of Existing Notes, representing approximately 0.4% of outstanding existing notes, had been tendered into the exchange offers.
Still, it’s worse than where iHeart was on Aug. 16, when an aggregate amount of approximately $45.5 million of Existing Notes — representing approximately 0.6% of outstanding Existing Notes — had been tendered into the Exchange Offers.
The terms of the Exchange Offers, Consent Solicitations and Term Loan Offers remain unchanged.
The latest extension from iHeart led to more wobbles on Wall Street for the publicly traded “stub” on iHeart stock. As of the last trade seen by 3pm Eastern Friday, IHRT shares were down 12.5%, to 63 cents.
Meanwhile, Clear Channel Outdoor Holdings shares were up 1.1% to $4.80 as of 3:10pm Eastern.
CC INVESTORS CHALLENGE iHEART LOANS IN COURT
There’s another challenge for iHeart, aside from its overwhelming rejection by lenders of its term loan and exchange offers.
According to Courthouse News Clear Channel shareholders on Dec. 29, 2017 brought a derivative class action lawsuit over the $1 billion loaned to iHeartMedia, arguing that the financial aid was presented at “far-below-market interest rates” despite Clear Channel’s own $20 billion debt.
“Rumors of impending bankruptcy made it increasingly difficult, if not impossible, for iHeart to issue debt in the public market or through arms-length negotiations,” the complaint says. “As a result, iHeart depended more heavily than ever upon the cash management sweep arrangement and the Revolving Note with Clear Channel, which provided iHeart desperately needed cash flow. Indeed, the Revolving Note became iHeart’s principal source of liquidity.”
The complaint further claims that, should iHeart become insolvent or file for bankruptcy protection, “Clear Channel would become just another unsecured creditor of iHeart unlikely to ever be repaid in full, if at all.”
For veteran financial analyst and top blogger Michael Boyd, a path toward Chapter 11 bankruptcy reorganization is likely the best route forward. Writing for Seeking Alpha, the registered independent advisor recently shared his thoughts on iHeart by summarizing its current financial state of affairs.