IHeart (Clear Channel) skips $106 million interest payment

https://www.businesswire.com/news/home/20180201005556/en/iHeartCommunications-Announces-Elected-Interest-Payment-Unsecured-Notes

The management of Clear Channel / iHeart has made a choice to not pay the $106 million due on February 1st. There is a 30 day grace period during which iHeart can try to strike a deal. So far, iHeart has strung out their $20 billion in debt by offering higher rates and longer terms.

Cumulus tried a similar strategy a few months ago and failed to arrive at a deal and entered Chapter 11 bankruptcy. There is a lot of ill will between the lenders and Clear Channel management, so it may be difficult to prevent a voluntary bankruptcy.

Today happens to be a big day in the Cumulus bankruptcy proceedings and there are signs that the judge may not accept the plan put forth by management that stiffs the stockholders and most of the junior debt. The SEC has entered the case to protect the stockholders who will get nothing under the current plan.

http://www.insideradio.com/free/cumulus-heads-to-court-today-for-pivotal-bankruptcy-hearing/article_f66f00d8-072a-11e8-af56-bf67de793cf7.html

The iHeart debt holders are surely paying close attention to the millions of dollars in legal fees being billed because Cumulus did not conclude a voluntary reorganization.

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2 Responses to IHeart (Clear Channel) skips $106 million interest payment

  1. briand75 says:

    Interesting – ClearChannel may survive, but someone, somewhere is going to have to eat the debt.

  2. CC1s121LrBGT says:

    I was surprised to learn last year that that they operate stations in Australia and Canada as well as the USA. Most of the stations on their Australian web site http://www.iheartradio.com.au and Candaian website http://www.iheartradio.ca/home are geoblocked so that they will not stream to listeners in the USA but will stream to listeners in other countries such as the EU.

    The US music industry has been threatening stations outside the US with legal action if they allow people inside the US to listen to them without sending money to the US music industry. Most simply comply by blocking listeners from the US.

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