iHeart Skips More Interest Payments


On Thursday, the iHeartCommunications Board of Directors decided not to pay $138 million in interest payments. The reason for this latest decision, according to an SEC filing, is that discussions are continuing with lenders, noteholders, and financial sponsors regarding a comprehensive debt restructuring. Another 30-day grace period to make the payments has been set in motion as a result of this decision. Back on February 1, the Board voted not to pay $106 million in interest payments due. That 30-day grace period is about to expire.

iHeart has over $20 billion in debt and has been in extensive discussions with lenders to restructure that debt.

The interest payments due on March 1, 2018 were approximately $59.1 million on its outstanding 11.25% Priority Guarantee Notes due 2021 and approximately $78.8 million on its outstanding 9.0% Priority Guarantee Notes due 2021.

Bloomberg is reporting that advisors to some of iHeart’s senior creditors have seen bankruptcy documents and a filing could come this weekend. Bloomberg says the bankruptcy filing is all but certain. iHeart has been swapping term sheets, for a restructuring, with some of its lenders, but has been unable to reach an agreement to this point. The company has over $20 billion in debt. A 30-day grace period, after the company decided not to make a $106 million interest payment, is about to expire.

The Wall Street Journal is reporting that iHeart, its private-equity owners Bain Capital and Thomas H. Lee, and its lenders and bondholders are still in talks and there is still a possibility of striking an agreement that would delay a bankruptcy filing until after the weekend.

Bloomberg Technology is reporting that Liberty CEO John Malone’s plan for a radio empire is now coming into focus. As we reported, Liberty made a last hour pitch to invest in iHeart as the company heads toward a possible bankruptcy filing. Liberty also owns a huge stake in SiriusXM and recently made a substantial investment in Pandora. On a call with investors Thursday, Liberty CEO Greg Maffei said there would be “substantial synergies” between iHeart, SiriusXM and Pandora. “With the advantage we can bring to the table we think we can perhaps reduce some of the risks that are inherent in the business.”


  1. Here is a simple solution: iHeart needs to sell off stations. I’m sure they would want to dump off everything at once but no investor would be that big of a sucker and take on all that debt. There are smaller companies out there who would buy some of their properties.

    • They have a couple dozen properties in their Aloha and Ocean trusts. No one has bought them. The market is glutted with stations.

  2. FYI The lenders (Bain & Lee) are on the Board of Directors, so they approved these bonuses.

    But yes, as in the Cumulus bankruptcy, the bonuses can be canceled.

  3. iHeart creditors must love this! IHeart is continuing to stiff creditors on current interest payment obligations, while the IHeart Board of Directors continues to hand Bob Pittman and Bressler millions of dollars in bonuses. You wonder if an impartial Federal Bankruptcy Trustee might consider this an abdication of fiduciary reponsibility by the Board of Directors. Or much worse, if the Trustee might look at this as fraudulent conveyance by Pittman, Bressler, and the Board. Potentially, attorneys for the creditors could argue either of these scenarios to the Bankruptcy Court.


Please enter your comment!
Please enter your name here