Urban One is offering bondholders a deal to swap existing debt for new notes with extended deadlines and higher interest rates, as the broadcaster becomes the latest radio operator working to restructure its balance sheet and push back repayment obligations.
The company announced on November 14 that holders of its 7.375% bonds due in 2028 can either exchange them for new 7.625% notes due in 2031 plus some cash or sell them back to Urban One for a partial cash payout. At the same time, the company is raising up to $60.6 million through new 10.500% bonds due in 2030.
The transactions are backed by noteholders representing roughly 73% of the outstanding 2028 bonds, who’ve signed a support agreement committing to participate. Those supporting bondholders will receive a 3% premium on the new higher-rate notes as compensation for backstopping the deal.
Urban One is also asking bondholders to approve changes to the terms governing the 2028 notes that would eliminate most protective covenants, certain default triggers, and collateral requirements, while releasing subsidiary guarantees to give the Black-focused broadcaster more financial flexibility.
The offer comes with several participation requirements. Bondholders must tender all their notes, not just a portion, and the company won’t accept exchanges that would result in less than $2,000 in new notes being issued. Those wanting to participate in the subscription offer for the 10.500% notes must meet an early deadline of December 1 and provide funding by December 3. The overall offer expires December 15.
Urban One reported a difficult third quarter with total revenue declining 16% year-over-year to $92.7 million, driven by a 12.6% drop in radio revenue to $34.7 million and particularly steep declines in its Reach Media network, which fell 40% as DEI-focused advertising dried up and a major advertiser pulled back significantly.
Moelis & Company is managing the transaction, with D.F. King handling administrative duties. The restructuring follows a familiar pattern among major US radio companies in recent years.
iHeartMedia completed a similar debt exchange in November 2024, pushing repayment deadlines to 2029-2031 with an average interest rate increase of 2.5%. The company secured participation from 92% of debt holders. Cumulus Media held its debt swap in April 2024, offering to exchange 6.75% notes due in 2026 for 8.75% notes due in 2029.
Beasley Media Group completed its own debt exchange in October 2024, with 98.4% participation from noteholders who swapped 8.625% notes due in 2026 for new 9.200% notes due in 2028. The company has since needed to extend key compliance deadlines twice in the past month, pushing a critical date from November 3, 2025, to January 31, 2026.
