Another deadline, another extension.
That’s a common theme for iHeartMedia in recent weeks, and on Thursday the nation’s No. 1 radio broadcasting company released that it has extended — for a ninth time — the deadline for participation in term loan offers to lenders and exchange offers to its debtholders.
Holders of five sets of notes due in 2021 have had weeks to consider iHeart’s offer to exchange existing notes for new securities of iHeartMedia, CC Outdoor Holdings Inc. and iHeartCommunications.
There’s been little interest, however, and as of 5pm Eastern on July 5, just 0.6% (or about $45.5 million) of outstanding existing notes had been tendered.
That was roughly the same percentage as six weeks earlier, and as of 5pm Eastern on Wednesday (7/19), there had been no change whatsoever from two weeks earlier, with noteholders refusing to participate in the offer.
One big reason for the lack of interest is likely tied to iHeart’s lack of willingness to made any amendments to the exchange offers and consent solicitations, which are exactly the same as originally offered some 14 weeks ago. Likewise, the terms of the term loan offers have not been amended and remain the same as stated on March 15.
That could explain why iHeart shares, which trade on the highly risky OTC Pink Sheet, tumbled 18.1% in Friday’s trading, to $1.31 as of 2:40pm Eastern.
Update: On Monday (7/24), iHeart stock sank an additional 12.9%, to $1.35.
Just before the closing bell, the “stub” of iHeart stock was off 5 cents a share, to $1.55.
The company’s stock is now trading where it was in mid-March and is off from a March 31 high of $3.84 per share. Volume was lower than normal, however, suggesting an institutional sale of a block of iHeart stock was seen.
The term loan offers have been extended to 5pm Eastern on August 4, as have the exchange offers and consent solicitations.
How many more extensions will iHeart engage in?
That all depends on whether or not it decides to accept, or negotiate, a counteroffer to its ongoing attempt to complete a debt swap that has thus far seen scant interest from note holders.
According to the San Antonio Express-News, the counterproposal made to iHeartMedia calls for $500 million in newly issued debt secured directly by equity in the company — and 49% equity stakes in both iHeartMedia’s radio stations and Clear Channel Outdoor, should the two divisions be spun into separate companies, which iHeart desires.
The proposal was made by Arnold & Porter Kaye Scholer, an advisor to Symphony Asset Management, which holds about $280 million in iHeart term loans.
With some $20 billion in debt, iHeart has some $316.5 million in debt maturing this year, in addition to $324.2 million in 2018, and a whopping $8.4 billion in 2019 — which many industry observers warn is a “debt bomb” that could have a significant impact on the entire radio industry.
— Reporting by Adrian Zupp, in Boston, and Adam Jacobson, in Miami