iHeartCommunications gets consents to amend notes due 2021, none for priority guarantee issues

By Susanna Moon

Chicago, Dec. 12 – iHeartCommunications, Inc. said it had received consents from holders of $1,286,154,353 principal amount, or 81.5%, of its senior notes due 2021.

As announced Nov. 28, the company was soliciting consents for permission to exclude some holders from future consent solicitations.

Specifically, the company was seeking to amend the indentures of six series of its notes in order to exclude holders who are neither institutional accredited investors nor non-U.S. persons from any offer to consent, waive or amend the terms of the notes as part of an exchange offer.

iHeartCommunications was offering a fee of a specified dollar amount for each series of notes covered by the solicitation. The fee will be divided among all holders who deliver consents.

The fee has two parts, a fixed amount to be paid if the solicitation were successful and a contingent consideration to be paid on the effectiveness of a subsequent amendment to the note indenture where the consideration for the amendment includes debt or equity securities issued on an unregistered basis in an exchange offer transaction. The contingent fee would only be paid once.

The solicitation ended at 5 p.m. ET on Dec. 7.

After receiving the needed consents for the notes due 2021, the company executed a supplemental indenture to the notes.

iHeartCommunications will pay an aggregate cash payment of $1,729,168 for the fixed fee to consenting holders, which will be allocated in an amount equal to about $1.20 for each $1,000 principal amount, according to a company update.

After a subsequent amendment, the company will pay an aggregate cash payment of $2,593,752 for the contingent fee to consenting holders pro rata, which would be about $1.80 for each $1,000 principal amount.

As for the remaining five series, the company failed to receive the consents from holders representing a majority of each of the priority guarantee notes outstanding.

The notes included in the solicitation and the fees were as follows:

• $1,999,815 fixed fee and $2,999,723 contingent fee for the 9% priority guarantee notes due 2019;

• $1.75 million fixed fee and $2,625,000 contingent fee for the 9% priority guarantee notes due 2021;

• $575,000 fixed fee and $862,500 contingent fee for the 11¼% priority guarantee notes due 2021;

• $1 million fixed fee and $1.5 million contingent fee for the 9% priority guarantee notes due 2022;

• $950,000 fixed fee and $1,425,000 contingent fee for the 10 5/8% priority guarantee notes due 2023; and

• $1,729,168 fixed fee and $2,593,752 contingent fee for the senior notes due 2021.

The company said on Dec. 2 that it had amended its consent solicitations for the six note series in order to “clarify the language” of the amendment.

iHeartCommunications said the new wording was intended to eliminate confusion.

The purpose of the amendment was still to allow the company to make exchange offers to holders of notes who are either institutional accredited investors or non-U.S. persons as defined in Regulation S in offshore transactions without registering the debt or the equity on offer.

However in the revised amendment the company limited its ability to exclude holders from an exchange offer. It only applies to holders whose inclusion would require the company to register the offering in foreign jurisdictions. iHeartCommunications also removed language saying that the company had the sole discretion to determine whether that registration requirement applied.

Moelis & Co. LLC (877 751-3389) is the solicitation agent. Global Bondholder Services Corp. (212 430-3774 or 866 470-3900) is the tabulation agent and information agent.

iHeartCommunications is a San Antonio-based media and entertainment company.

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