The audio media company led by President/CEO Mary Berner on Wednesday (5/26) initiated actions designed to pay down $175 million of debt.
And, it is doing so by using cash on hand.
First, on May 17, Cumulus completed a $60 million repayment of its ABL Revolver due 2025, which represented the entirety of the amount outstanding under the facility.
Following the paydown, the ABL Revolver due 2025 is undrawn and available as liquidity for general corporate purposes.
Importantly, Cumulus was required by the terms of its debt agreements to make mandatory debt prepayments from the proceeds of its 2020 land sale in Bethesda, Md., once home to the broadcast towers of the old WMAL-AM 630, now an ESPN Radio affiliate under different call letters.
Then, on Tuesday (5/25), Cumulus moved forward with paying down approximately $89 million of its Term Loan Credit Facility due 2026 related to what Cumulus is calling a mandatory prepayment obligation.
Approximately $65 million of the prepayment is related to the Land Sale, and approximately $23 million of the prepayment is related to the Tower Sale.
Additionally, pursuant to the terms of its 6.75% Senior Secured First Lien Notes due 2026, Cumulus launched a tender offer for the Notes at par for approximately $26 million, which represents the pro rata amount required to be offered from the proceeds of the tower sale.
Following the expiration of the tender offer, any amounts that remain untendered will be directed toward an additional prepayment of the Term Loan.
In a statement, Berner noted that the continuing improvement in economic and public health conditions has created a backdrop where Cumulus can accelerate debt repayments, which will more rapidly de-lever the balance sheet and reduce interest expense, further increasing Cumulus’ cash flow.
She added that since Cumulus’ 2018 emergence from voluntary Chapter 11 bankruptcy reorganization, the company has reduced its net debt by nearly $600 million.
“Looking ahead, our better leverage profile and more than $200 million of available liquidity will provide us meaningful financial flexibility as we continue along our strong rebound trajectory,” Berner said.