Reorg

CC Media Holdings, Inc.

iHeartMedia Sends New Proposal To Cooperation Group Advisors

Fri 01/12/2018 04:40 PM EST

iHeartMedia has sent a proposal to PJT Partners and Jones Day, the advisors for the cooperation group of term loan lenders and PGN noteholders, according to sources. The company, sources note, developed the proposal after being informed of the bid/asks presented in San Francisco at the previously reported creditor meeting hosted by the cooperation group in late December.

For review, the creditor meeting was attended by (in addition to the cooperation group) representatives from the term loan lender group represented by Ducera and Arnold & Porter Kaye Scholer, a legacy noteholder group represented by White & Case, and the 14% noteholder group represented by GLC Advisors and Gibson Dunn. In exchange for their consent to a restructuring transaction, the groups presented the following asks:

Representatives of the legacy noteholder group requested recovery in the range of low 50 cents on the dollar.
Representatives from the 14% noteholder group said they would not take less than primary recovery in the mid-teens, in addition to warrants.
Certain members of the cooperation group said they would not allow more than $400 million in value leakage to the bottom of the capital structure, but other members of the cooperation group said they would be willing to allow $475 million in value leakage on the basis of their understanding that the additional $75 million may get a deal done with creditors.

Subsequent to the meeting, the group of iHeart's 14% noteholders released their guarantees under the 14% notes indenture. According to sources, the group’s move relates to turnover obligations to senior secured creditors under the documents governing the 14% notes. Sources add that the releasing noteholders are seeking to protect their downside in the event of a non-consensual bankruptcy filing but continue to intend to work with other creditors and the company toward a consensual restructuring.

iHeart is advised by Moelis & Company and Kirkland & Ellis.

iHeartMedia declined to comment for this story. Private equity sponsors T.H. Lee and Bain Capital, and advisors to the cooperation group and company did not respond to requests for comment.

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