iHeartMedia entered into a transaction support agreement (TSA) with a majority of lenders and noteholders of iHeartCommunications’s outstanding debt, marking a step in the company’s efforts to extend debt maturities and strengthen its financial position._x000D_
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The TSA agreement, signed by iHeartMedia and certain of its subsidiaries, covers approximately 80% of iHeartCommunications’ existing debt, which includes senior secured notes due between 2026 and 2028, as well as other outstanding term loans. Under the terms of the TSA, two alternative exchange offer structures will be available to holders of this debt, extending the maturities by three years and providing additional financial flexibility to support iHeartMedia’s strategic initiatives._x000D_
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Simpson Thacher & Bartlett is advising iHeartMedia on the transaction, with New York-based partners Patrick Ryan and Sandy Qusba leading the legal team. Financial advisory services are being provided by PJT Partners._x000D_
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The TSA outlines two possible paths for restructuring. The first structure allows iHeartCommunications to issue new secured debt, contingent on reaching a specified level of participation among debt holders. If participation thresholds are not met, a second structure would allow newly-formed subsidiaries of iHeartMedia to issue the secured debt, backed by transferred assets and an intercompany note. Both options aim to alleviate the company’s debt load and boost its operational flexibility._x000D_
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As part of the transaction, iHeartMedia also amended its ABL (asset-based lending) facility to allow both restructuring alternatives, adjust certain covenants and increase the interest rate. These changes are subject to conditions, including the completion of one of the proposed exchange transactions.
Forward for Specialty Finance
