Wednesday, December 20, 2017

iHeartMedia investors reject company plan to avoid bankruptcy" (IHRT)

Just following up on this one. Although there were a couple different ways to trade the debt (despite some credit default swaps being triggered almost a year ago) shorting the equity (worthless but bid at 59 cents) was not formally doable. So it is more my fascination with $20 billion in debt not getting re-negotiated for what seems like forever.

The hometown paper has been our go-to and here it is again, December 5.
From the San Antonio Express-News:
iHeartMedia’s investors are demanding almost entire control of the beleaguered company as it tries to negotiate its way out of bankruptcy.

Bondholders have rejected the San Antonio-based radio giant’s request to extinguish about $14.6 billion of its debt in exchange for 87.5 percent of the company and 87.5 percent of its wholly owned billboard subsidiary. The plan proposes to recapitalize the company with $7 billion in fresh bonds.
The creditors involved in negotiations, led by mutual fund company Franklin Resources, are demanding of 95.3 percent of the company and 100 percent of the iHeartMedia’s ownership of its financially stronger billboard subsidiary, Clear Channel Outdoor Holdings Inc. iHeart owns 89.5 percent of the billboard unit.

The lenders and bondholders “don’t want management to have anything. They want it all,” said Seth Crystall, senior credit analyst for Debtwire, an Acuris company.

Negotiations are continuing behind closed doors as the company attempts to restructure $14.6 billion of its more than $20 billion of total debt, said iHeartMedia, which is the largest radio station owner in the nation.

“No agreement has been reached,” the company said in the filing. “There can be no assurance that any agreement will be reached. Any such agreement will require the consent of additional debt holders who are not party to the negotiations, and who hold substantial percentages of our debt.”
The difference between the two sides amounts to about $800 million, said Philip Brendel, a Bloomberg Intelligence credit analyst.

“The lender group is not moving much. They believe their best interests will be served by the company filing for bankruptcy” instead of an out-of-court agreement, Brendel said.

Much of iHeartMedia’s $20.6 billion in total debt stems from 2008 when two Boston-based private equity firms, Bain Capital Partners and Thomas H. Lee Partners, bought 70 percent of the company, which was called Clear Channel Communications at the time. About 30 percent of the company remains publicly traded....
May 4
Bain Capital/Thomas H Lee-Controlled iHeartMedia Probably Facing Bankruptcy (IHRT)
July 26 
Bain Capital/Thomas H Lee-Controlled iHeartMedia Continues Stately Descent Into Bankruptcy (IHRT)
As was said back in May:
"This wouldn't really be noteworthy except for the fact IHRT is the largest operator of radio stations in the U.S. and the debt involved is a bit over $20 Billion.". 
Aug. 4
"iHeartMedia edges closer to bankruptcy with $174 million 2Q loss" (IHRT)