iHeart Lenders Make Counter Proposal On Debt

Radio Ink reports on Tuesday that a counteroffer to iHeartCommunications Debt restructure proposal was made by Arnold & Porter Kaye Scholer (APKS), an advisor to Symphony Asset Management, which holds about $280 million in iHeart term loans. The counterproposal made to iHeartMedia is for $500 million in newly issued debt secured directly by equity in the company and 49 percent equity stakes in both iHeartMedia’s radio stations and iHeart’s billboard company, Clear Channel Communications, if the two divisions are spun out into separate companies.

In a letter filed with an iHeart 8K Monday, Symphony said it believes that the proposed alternative transaction could obtain significant support from the company’s debt investors and finally bridge the chasm between the company and certain of its stakeholders. Symphony and APKS have been in regular contact with several of iHeart’s largest lenders, including OppenheimerFunds and Eaton Vance, regarding the alternative proposal. Symphony says those lenders have indicated they would consider the new proposal and would like to see a formal term sheet.

The New York Post reports that Franklin Advisors, iHeart’s largest creditor, will need to agree to the proposed terms before Symphony, and other creditors, will sign any revised proposal. Franklin owns approximately $2.3 billion of iHeart’s  $20 billion is debt and they are reviewing the proposal.

iHeart has $316.5 million in debt maturing this year, $324.2 million in 2018, and $8.4 billion in 2019.

Shares of IHeartMedia dropped 8.6% Tuesday as investors reacted to the news.

Insider’s Take – Now things are starting to heat up. This would be a strong proposal for debt holders.  The question will be, how anxious is iHeart to get a deal done? The debt maturities are smaller this year and 2018.  Does iHeart hang tough for a while as they work for a better deal? 

 


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