As the clock ticks down, Audacy is once again moving to reset the hourglass on its looming interest payments. According to a December 11 SEC filing, all eyes will be on the company leading up to Friday as Audacy works with lenders to extend the grace period, reducing the risk of default.
This adjustment highlights a critical financial juncture for Audacy, as lenders and banks grow more anxious over the company’s financial state. Earlier this month, JPMorgan Chase stepped down from its role as Audacy’s Letter of Credit and Swing Line Lender. With $57.38 million in cash reported at the end of Q3 2023 in September, the company faces $50.79 million in overdue interest.
Per Monday’s filing, Audacy now has a 68-day deadline to satisfy its lenders as long as all parties can agree to a plan concerning its funded debt, otherwise, a shorter 45-day period will apply if no substantial accord is presented by Friday, December 15.
The grace period affects multiple overdue interest payments, including $17 million originally due on October 31, $785,592 originally due on November 8, and $1.125 million scheduled for December 28.
The SEC filing showed Audacy has also negotiated more leeway on when they could be considered in default for not paying interest on some of their long-term debts, specifically for their 2027 and 2029 Notes. Originally, Audacy had a 40-day grace period for its 2027 Notes and a 71-day grace period for its 2029 Notes. Audacy managed to extend these periods to 67 days for the 2027 Notes and 99 days for the 2029 Notes.
However, there’s a condition attached. If by Friday, Audacy doesn’t present a nearly completed agreement that addresses its overall debt situation to the satisfaction of the majority of the lenders for either set of notes, then the grace periods will be shortened. The 2027 Notes’ grace period will be reduced to 44 days, and the 2029 Notes will have their grace period cut down to 76 days.
There’s another deadline too: if by December 18, Audacy hasn’t finalized and received approval from the majority of lenders on this debt agreement, then the grace periods will change again – to 47 days for the 2027 Notes and 79 days for the 2029 Notes.
