iHeartMedia Completes Comprehensive Exchange Transactions

Rhea-AI Summary

iHeartMedia (NASDAQ: IHRT) has successfully completed comprehensive exchange transactions for approximately $4.8 billion (92.2%) of its existing debt. The exchange includes various secured and unsecured notes due 2026-2028 for new secured notes due 2029-2031. Key outcomes include:

- Extension of debt maturities by three years
- Reduction in total debt by over $440 million
- Expected flat consolidated annual net cash interest payments
- Strengthened capital structure with increased flexibility

The exchange saw high participation rates, including 94.4% of 2026 Secured Notes, 99.1% of 2027 Secured Notes, 44.6% of 2028 Secured Notes, 92.1% of Unsecured Notes, and 99.7% of Existing Term Loans.

Positive

• Debt maturity extended by 3 years, improving financial flexibility
• Total debt reduced by $440+ million
• High participation rate (92.2%) in exchange offers
• Net cash interest payments expected to remain flat

Negative

• Company still carries significant debt load despite restructuring
• Lower participation rate (44.6%) for 2028 Secured Notes compared to other debt instruments

Insights

Financial Restructuring Specialist

This debt restructuring represents a major financial overhaul for iHeartMedia. The $4.8 billion exchange offer, representing 92.2% participation, substantially improves the company's debt profile. The key achievements include a $440 million reduction in total debt, a three-year extension of debt maturities and maintaining relatively flat annual net cash interest payments.

The high participation rates - particularly the 99.7% for existing term loans and 99.1% for 2027 secured notes - indicate strong creditor confidence in the restructuring plan. The new debt structure, featuring tiered security levels and staggered maturities through 2029-2031, creates a more sustainable capital stack. This provides important operational flexibility and breathing room for the company's digital transformation initiatives.

The exchange of unsecured notes for secured instruments, albeit at higher interest rates, reflects a defensive positioning that prioritizes debt service sustainability over immediate cost reduction. This trade-off is prudent given current market conditions and iHeart's position in the evolving media landscape.

Media Industry Analyst

This financial restructuring is strategically vital for iHeartMedia's competitive positioning in the digital audio era. As the dominant radio broadcaster reaching 90% of Americans monthly, the company needs financial flexibility to continue investing in digital transformation and podcast leadership.

The debt restructuring provides essential runway for iHeart to capitalize on its market-leading position across broadcast, streaming and podcasting. The company's claim of being the largest podcast publisher with superior download numbers versus competitors suggests strong digital momentum that this restructuring can help accelerate.

The maintained interest expense levels, despite reduced total debt, represent a calculated cost of securing longer-term stability. This stability is important as iHeart balances traditional radio operations with digital growth initiatives. The strengthened capital structure should support continued investment in technology and content, essential for competing with pure-play digital platforms.

NEW YORK--(BUSINESS WIRE)-- iHeartMedia, Inc. (NASDAQ: IHRT) (“iHeartMedia” or the “Company”) today announced the successful completion of its previously announced comprehensive exchange transactions of iHeartCommunications, Inc.’s (“iHeartCommunications”) outstanding 6.375% Senior Secured Notes due 2026 (the “2026 Secured Notes”), 5.25% Senior Secured Notes due 2027 (the “2027 Secured Notes”), 4.75% Senior Secured Notes due 2028 (the “2028 Secured Notes”), 8.375% Senior Notes due 2027 (the “Unsecured Notes”) and senior secured term loans due 2026 (the “Existing Term Loans”) (collectively, the “Existing Debt”) for new 9.125% Senior Secured First Lien Notes due 2029, 7.750% Senior Secured First Lien Notes due 2030, 7.000% Senior Secured First Lien Notes due 2031, 10.875% Senior Secured Second Lien Notes due 2030 and senior secured first lien term loans due 2029, respectively, in each case issued by iHeartCommunications (collectively, the “Exchange Offers”).

Approximately $4.8 billion (or 92.2%) of the aggregate principal amount of the Existing Debt participated in the Exchange Offers, which expired at 9:00 a.m., New York City time, on December 18, 2024 (the “Expiration Time”).

As a result of the transactions, iHeartMedia has extended the vast majority of its debt maturities by three years; its consolidated annual net cash interest payments are expected to remain relatively flat; and the Company has reduced its total debt by over $440 million. The completion of the Exchange Offers results in a strengthened capital structure that provides iHeartMedia with extended maturities which increases its flexibility to execute on its strategy and business initiatives.

As of the Expiration Time, approximately $755.4 million (or 94.4%) of the aggregate principal amount of the 2026 Secured Notes, approximately $743.0 million (or 99.1%) of the aggregate principal amount of the 2027 Secured Notes, approximately $223.1 million (or 44.6%) of the aggregate principal amount of the 2028 Secured Notes, approximately $844.0 million (or 92.1%) of the aggregate principal amount of the Unsecured Notes, in each case, were tendered in the Exchange Offers and approximately $2,258.7 million (or 99.7%) of the aggregate principal amount of the Existing Term Loans participated in the Exchange Offers.

Additional details on the completion of the comprehensive exchange transactions are included in a Form 8-K filed today.

Simpson Thacher & Bartlett LLP served as counsel and PJT Partners served as financial advisor to the Company. Davis Polk & Wardwell LLP served as counsel and Perella Weinberg Partners served as financial advisor to an ad hoc group of certain of the holders of the Existing Debt.

About iHeartMedia, Inc.

iHeartMedia, Inc. [Nasdaq: IHRT] is the leading audio media company in America, with 90% of Americans listening to iHeart broadcast radio in every month. iHeart’s broadcast radio assets alone have a larger audience in the U.S. than any other media outlet; twice the size of the next largest broadcast radio company; and over four times the ad-enabled audience of the largest digital only audio service. iHeart is the largest podcast publisher according to Podtrac, with more downloads than the next two podcast publishers combined, has the most recognizable live events across all genres of music, has the number one social footprint among audio players, with seven times more followers than the next audio media brand, and is the only fully integrated audio ad tech solution across broadcast, streaming and podcasts. The company continues to leverage its strong audience connection and unparalleled consumer reach to build new platforms, products and services. Visit iHeartMedia.com for more company information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241223807105/en/

Media

Wendy Goldberg

Chief Communications Officer

(212) 377-1105

wendygoldberg@iheartmedia.com

Investors

Mike McGuinness

EVP, Deputy CFO, and Head of Investor Relations

(212) 377-1336

mbm@iheartmedia.com

Source: iHeartMedia, Inc.

FAQ

How much debt did iHeartMedia (IHRT) restructure in its 2023 exchange offer?

iHeartMedia restructured approximately $4.8 billion, representing 92.2% of its existing debt through comprehensive exchange transactions.

What is the reduction in iHeartMedia's (IHRT) total debt after the exchange?

The exchange transactions resulted in a reduction of over $440 million in iHeartMedia's total debt.

How long did iHeartMedia (IHRT) extend its debt maturities?

iHeartMedia extended the majority of its debt maturities by three years through the exchange transactions.

What are the new maturity dates for IHRT's exchanged notes?

The new notes have maturities in 2029, 2030, and 2031, compared to the previous notes that were due between 2026 and 2028.

How will the exchange affect IHRT's annual interest payments?

The company expects its consolidated annual net cash interest payments to remain relatively flat following the exchange.