Today is iHeart drop dead day

It’s May 16th today – the day the trial starts on whether or not iHeart / Clear Channel is in default. The Texas state judge gave iHeart and the lenders time to negotiate the differences so she doesn’t have to be involved.

The rumblings via Tom Taylor’s newsletter is the lenders want to review the company’s finances and the company has said no. Even if the judge is sympathetic to the business, that attitude is hard to ignore.

Stay Tuned

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2 Responses to Today is iHeart drop dead day

  1. Fred Stiening says:

    Reuters reported on Friday that iHeart hired a restructuring firm
    http://www.reuters.com/article/us-iheartmedia-debt-restructuring-exclus-idUSKCN0Y501E

    With some familiarity with Bob Pittman, this has the feel of a delaying tactic to ask the judge for time – not a genuine effort to negotiate

  2. Fred Stiening says:

    http://nypost.com/2016/05/16/iheart-frustrates-creditors-with-greedy-offer/

    NY Post is interested – iHeart leaked the negotiations of what they offered the lenders and what the lenders countered with. It’s very complicated and mostly gibberish. The lenders don’t necessarily want a default – that would force the loans to become non-performing. If there was something to “save” with new management, they would be more motivated.

    Clear Channel outdoors sold off 5,000 billboards a few months ago for $485 million. That will pay the interest for about 3 months. The essence of the problem is those loans are guaranteed by assets. If things are sold like the billboards, the proceeds are supposed to be used to pay down the debt in a specific order. What iHeart did was declared a special dividend and paid $200 million to the parent which was not used per the loan agreements. iHeart wants to be allowed to continue to separate the collateral from the senior lenders. Try selling your car without first paying off the car loan and see what happens.

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