Yet again Radio One has formally extended the deadline for its long-pending exchange offer for its 8-7/8% Senior Subordinated Notes due 2011 and its 6-3/8% Senior Subordinated Notes due 2013. Most of the notes have been tendered, but the tenders can’t close because Radio One is still negotiating related issues on refinancing its balance sheet.
Don’t bet on this date holding, but the tenders, and the related consent solicitation, are now scheduled to expire at 5:00 pm ET on October 22, 2010.
As of the previous deadline of September 30, approximately 92% of the outstanding existing notes had been validly tendered into the exchange offer and not withdrawn. But, as noted, “at the previously scheduled expiration time, the conditions necessary to consummate the exchange offer as set forth in the Company’s Exchange Offer and Consent Solicitation Statement and Offering Memorandum, dated June 16, 2010, were not satisfied and, as a result, the Company has determined to further extend the exchange offer.”
Despite the length of the negotiations, Radio One management remains optimistic. “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,” the company said.
As the refinancing process has dragged on, Radio One entered into a forbearance agreement with Wells Fargo Bank as administrative agent for its bank group and is in technical default on its 2013 notes because the senior lenders have blocked it from making a scheduled interest payment. Even so, there’s no indication that the bondholders plan to take any action on the default as refi negotiations go on.
“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,” the company said on Friday.