Radio One extends exchange offer, rethinking options


Holders of Radio One’s senior subordinated notes due 2011 and 2013 are getting a little longer to take advantage of the company’s offer to exchange them for new notes at higher interest due 2017. The exchange offer is part of a larger refinancing that the company announced last month – which may now face some reworking.

Investor response to the refi offers has not met expectations, so Radio One says it is reevaluating its options with regard to its plan to acquire an additional 19% stake in TV One. The subscription offer for holders of existing debt to buy new second-priority notes due 2016, by which Radio One hoped to raise most of the cash to buy the additional TV One stake for $82 million, didn’t get enough participation by the July 15th deadline and has now been called off. As a result, Radio One is evaluating its options regarding the purchase of the additional TV One stake.

The exchange offer, meanwhile, drew 89.8% participation by the scheduled July 15th expiration, but the condition necessary to consummate the exchange offer have not yet been met, so Radio One has extended the expiration date to 5:00 pm ET on Saturday, July 31. In the meantime, the company said it is in discussions with representatives of an ad hoc group of holders of its existing notes concerning possible amendments to the exchange offer – so stay tuned.

Radio One had offered to exchange: (i) for each $1,000 principal amount of its outstanding 8 7/8% Senior Subordinated Notes due 2011 $1,000 in principal amount of the Company’s newly issued 11.0%/12.0% Senior Grid Notes due 2017 (the “Exchange Notes”); and (ii) for each $1,000 principal amount of its outstanding 6 3/8% Senior Subordinated Notes due 2013 $900 in principal amount of the new notes, with a concurrent consent solicitation “to amend the indentures governing the Existing Notes to delete substantially all of the covenants contained therein.” That is the exchange offer which has been extended to July 31st.