Urban One Ignites A Huge Note Offering For a Debt Swap


Urban One has priced its offering of $825 million in aggregate principal amount of senior secured notes due 2028, which RBR+TVBR first reported on Thursday.

It’s a private offering of 7.375% notes — exempt from the registration requirements of the Securities Act of 1933, as amended.

That rate matches one series of notes due 2022, and is lower than the rate for a second round of notes also due next year.

The notes will initially be guaranteed on a senior secured basis by Urban One and its various subsidiaries and secured, subject to certain exceptions, on a first-priority basis by the notes priority collateral and on a second-priority basis by the collateral securing the company’s asset based loan facility.

Further, the Notes will be general senior secured obligations of Urban One and will be guaranteed on a senior secured basis by certain of the company’s direct and indirect restricted subsidiaries.

What’s the purpose of the $825 million note offering?

Urban One, which owns TV One (and Cleo); the Radio One broadcast station unit; and national radio entity Reach Media — in addition to a casino resort in Prince George’s County, Md. — intends to use the net proceeds from the offering, together with cash on hand, for three specific needs.

First, Urban One wishes to repay or redeem its loans outstanding under an April 17, 2017 Credit Agreement, with Guggenheim Securities Credit Partners as administrative agent and The Bank of New York Mellon as collateral agent.

Second, and perhaps most notably, it is a debt swap.

The issuance of the notes due 2028 would extinguish Urban One’s obligations tied to both its 8.750% Senior Secured Notes due December 2022 and its 7.375% Senior Secured Notes due 2022.

Third, the new note offering would help Urban One in paying off its outstanding loan tied to a Dec. 4, 2018 credit agreement with Wilmington Trust as administrative agent and TCG Senior Funding L.L.C. as sole lead arranger and bookrunner.

Urban One shares finished Friday’s trading at $6.14, declining 11.65% from Thursday following a 100%-plus rise on January 6.