• iHeart & Lenders – Is There Finally A Deal?

    In an SEC 8-K filing dated February 9th, it appears that iHeart Communications and the Lender group, representing $20 billion in debt, may be very close to a deal.

    The filing indicated that on February 8th, the Lender group provided to iHeart the following term sheet which includes:

    •  A Pre-packaged/Pre-arranged bankruptcy
    • Debt Consideration – Term Loan Holders & PGN’s
      • $5.5 billion in new Debt at a recapitalized iHeart
      • 5-7 year maturity
      • Collateral in substantially all assets of a recapitalized iHeart
    • Equity Consideration
      • 94.75% equity in a recapitalized iHeart
      • 100% of iHeart’s ownership in Clear Channel Outdoor (which would be 89.5% direct ownership)
    • Junior Stakeholders
      • $200 million new debt at recapitalized iHeart
      • 5.25% equity in recapitalized iHeart
      • 3.3% warrants struck at $6.5 billion equity value

    iHeart seems to be on board, as a previous proposal they had made to the Lender’s had included many of the same terms.  The sticking point according to Radio Business Reports is over the percentage of equity in a recapitalized iHeart it is willing to give up. For iHeart, the percentage previously offered to its lenders is 89.5%.

    Insider’s take – iHeart is slowly moving up on the equity percentage in iHeart while the Lenders have always held firm and, Insider thinks, will continue to do so.  Expect this deal to get done quickly.

    In any event, Clear Channel Outdoor will be under new majority ownership as no one is disputing that the 89.5% ownership that iHeart has in CCO is going to the Lenders. We think that will only benefit Clear Channel Outdoor going forward.

    When details are finalized, we will let you know. 



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