Wednesday, March 2, 2016

iHM, Creditors Reach Deal To 'Kick Debt Down The Road'

iHeartMedia has reached an agreement with a group of lenders that could forestall a fight over whether the company violated its debt agreement, according to two people with knowledge of the matter.

Bloomberg reports the creditors have agreed to temporarily hold off from filing a default notice claiming that IHeart breached its debt terms by shifting assets to its Broader Media LLC subsidiary last year, said the people, who asked not to be identified because the deal hasn’t been made public.

Under the so-called standstill agreement, the company won’t move any additional assets, the people said.

The deal gives creditors an opportunity to propose a plan to address IHeart’s more than $12 billion in debt coming due in the next five years, said the people. The company has been weighing how to address its wall of borrowings, a person with knowledge of the matter said last month.

The senior creditor group, which is represented by investment bank PJT Partners Inc. and law firm Jones Day, is working on a debt exchange that would push out maturities through at least 2020, the people said. The plan would call for Bain Capital LLC and Thomas H. Lee Partners -- the company’s private-equity owners -- to swap their senior debt for new obligations that come due later, the people said.

“Our operating business is strong and therefore provides us with the flexibility to manage our capital structure in a prudent manner,” iHM spokeswoman Wendy Goldberg said. “We’re always open to constructive dialogue with our lenders as we focus on positioning IHeartMedia for long-term growth.”

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