With an extended deadline on a short-term forbearance agreement forged with its lenders set to expire Tuesday (3/13) at 12:59am Eastern, iHeartMedia has taken another step closer to a restructuring of its capital structure. The nation’s No. 1 broadcasting company on Monday submitted to the Securities & Exchange Commission revised versions of a draft restructuring support agreement and related draft restructuring term sheet.
The revisions “reflect further negotiations” with the advisors to groups of iHeart’s noteholders, lenders and equity holders. We’ve compared the revisions to the original document, and some notable changes have been made.
The changes are to a support agreement and term sheet first shared March 5, following the March 2 SEC filing of its “attempt to harmonize the views that it has received directly from the various groups of noteholders, lenders and the company’s equity holders.”
That’s iHeart parlance for a new term sheet it presented to its lenders, leading to the back and forth negotiation and further filings.
One of the key changes in the revised restructuring support agreement reflects the allowed participants among iHeart’s consenting stakeholders. In the March 11 revision filed Monday, holders of at least 67% of the aggregate outstanding principal amount of Term Loan Credit Facility Claims and PGN Claims; holders of at least 67% of the aggregate outstanding principal amount of Junior Debt Claims, excluding any Junior Debt Claims held by Company Parties or their Affiliates who are not Consenting Sponsors; and the Consenting Sponsors are considered parties to the agreement.
In the previous agreement, parties were limited to holders of at least half of the aggregate outstanding principal amount of Term Loan Credit Facility Claims and PGN Claims; holders of at least half of the aggregate outstanding principal amount of Junior Debt Claims; and the Consenting Sponsors.
Thus, iHeart’s willingness to acquiesce could signal a clearer path to a firm restructuring plan and Chapter 11 reorganization action.
A look at the revised Term Sheet also reveals that iHeart has filled in the blanks, if you will, on certain terms. The company now says that its total outstanding principal amount of the company parties’ obligations under iHeart’s receivables based credit facility (or, its “ABL Facility”) is $371 million, plus prepetition accrued interest.
Further, the total outstanding principal amount of the company parties’ obligations under the Term Loan Credit Facility is $6.3 billion.
The total outstanding principal amount of the company parties’ obligations under the 2019 PGNs is $2 billion (plus prepetition accrued interest).
Additionally, a new “Other PGN Claims” section appears in the revised terms. In this section, iHeart notes that the total outstanding principal amount of the company parties obligations under the other PGNs is $4.752 billion, plus the interest.
The revised term sheet from iHeart also offers new details on its “2021 Notes Claims and Legacy Notes Claims,” as the first term sheet submitted to the SEC was void of dollar amounts.
- the total outstanding principal amount of the Company Parties’ obligations under the 2021 Notes is $2.235 billion (plus prepetition accrued interest)
- the total outstanding principal amount of the Company Parties’ obligations under the Legacy Notes is $532 million (plus prepetition accrued interest).
Meanwhile, iHeart remains prepared to issue a significantly level of new debt under the revised terms. While the language is slightly amended in the revised term sheet, some $5.5 million in new secured debt is to be issued by the reorganized iHeart.
No agreement has been reached and discussions remain ongoing, iHeart reminds the SEC, as it continues to work with its principal creditor and equity constituents “to develop a consensual transaction to allocate consideration among its various stakeholders.”
But, iHeart also reminds the SEC, “there can be no assurances that a consensual tranaction or any agreement will be reached.”
