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.
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.