In its recent Q3 earnings report, iHeartMedia introduced a plan to address its debt by offering new terms to holders of its outstanding bonds and loans. In doing so, they would push the due date on most of its debt to 2030 at an average 2.5% interest rate hike.
iHeart has outlined two possible paths for debt restructuring: Comprehensive Exchange Offers or Alternative Exchange Offers, depending on how many investors participate.
For holders of the $800 million in 6.375% Senior Secured Notes due 2026, iHeartMedia is offering:
- Comprehensive Option: $940 in new 9.125% Communications 1L Notes due 2029 and $50 in cash for every $1,000 of existing notes.
- Alternative Option: $935 in new 9.125% Entertainment I 1L Notes due 2029, $5 in new 7.750% Alternative Communications 1L Notes due 2030, and $50 in cash.
For the $750 million in 5.250% Senior Secured Notes due 2027, holders can choose:
- Comprehensive Option: $880 in new 7.750% Communications 1L Notes due 2030 and $50 in cash.
- Alternative Option: $875 in new 7.750% Entertainment I 1L Notes due 2030, $5 in new 7.750% Alternative Communications 1L Notes, and $50 in cash.
For the $500 million in 4.750% Senior Secured Notes due 2028, the options include:
- Comprehensive Option: $790 in new 7.000% Communications 1L Notes due 2031 and $5 in new 7.750% Alternative Communications 1L Notes.
- Alternative Option: $785 in new 7.000% Entertainment I 1L Notes due 2031 and $5 in new 7.750% Alternative Communications 1L Notes.
For the $916 million in 8.375% Senior Notes due 2027, both options offer $790 in new 10.875% Communications 2L Notes due 2030 for every $1,000 of existing notes.
If at least 95% of noteholders participate, iHeartMedia will proceed with the Comprehensive Offers, which include better terms and higher payouts. If fewer holders participate, the Alternative Offers, which have slightly lower payouts, will be implemented. iHeart says it has already secured commitments from 85.4% of its debt holders, including 95.3% of term loan holders and 89.5% of those holding the 2027 secured notes.
Notes tendered by November 29 will qualify for extra payouts, with a final deadline set for December 16.
iHeart’s advisors include PJT Partners and Perella Weinberg Partners, with legal counsel from Simpson Thacher & Bartlett LLP and Davis Polk & Wardwell LLP.
What will be different in 2030 that would make any savy investor feel that these clowns will be able to repay the principal? The increased interest payment are likely greater than the savings from all the heads that just rolled. Take 70 cents on the dollar and run.
70 cents? lol. They won’t see a dime. These iHeart investors are total suckers. 14 years with Bob Pittman as the boss, and not one penny of profit for iHeart in 14 years.