Radio One refi effort goes on

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As the deadline for the bond exchange offer tied to Radio One’s refinancing effort came again, the company – to no one’s surprise – has extended the exchange offer yet again. The company insists it is still making progress on the refi.


Radio One announced that it had further extended the expiration time of its previously announced exchange offer for its 8 7/8% Senior Subordinated Notes due 2011 and its 6 3/8% Senior Subordinated Notes due 2013, and the related consent solicitation, to 5:00 pm ET on November 5, 2010.

As of the most recent deadline of Friday (10/22) the company said approximately 92% of the outstanding notes had been validly tendered into the exchange offer and not withdrawn. But, since the overall refi has still not been worked out, the conditions for closing the exchange offer had not been met, leading to yet another extension. But, the negotiations with its lenders and the ad hoc group of note holders continue.

“The Company believes that it continues to make significant progress in reaching an agreement with the members of the ad hoc group of holders of a significant portion of its Existing Notes relating to certain amendments to the terms of the exchange offer and the related exchange notes, including the conditions to the exchange offer, and with its lenders under its existing senior secured credit facility relating to an amendment thereto,” Radio One stated.

Radio One remains in default on the 2013 notes since the 30-day grace period of making the August interest payment expired over a month ago, since it has been blocked by its senior lenders from making the payment. It is also operating under a forbearance agreement with its senior lenders. Nonetheless, neither the senior lenders nor the note holders have taken any legal action to invoke their rights under the default provisions.

“Based on its constructive dialogue with the members of the ad hoc group and its existing lenders, the Company does not expect such members of the ad hoc group or its existing lenders to exercise any remedies under such indenture or senior secured credit facility, as applicable, in the near term. At this time, however, the Company can provide no assurances that holders of the 2013 Notes or its existing lenders will not exercise any such remedies, that it will ultimately reach an agreement with the members of the ad hoc group and its existing lenders or that such parties will enter into a new support agreement to replace the prior agreement that expired in accordance with its terms on September 1, 2010 or a new forbearance agreement, as applicable,” Radio One said in its latest announcement concerning the refi negotiations.

RBR-TVBR observation: It is always good news when the parties continue to talk. This may be the “refi from hell,” but if it finally gets done Radio One CEO Alfred Liggins won’t be the only one breathing a sigh of relief. The creditors don’t really want to see this wind up in court either.