Urban One, Inc. Announces Final Results of Exchange Offer and Consent Solicitation for 7.375% Senior Secured Notes due 2022

Rhea-AI Summary

Urban One has successfully completed its Exchange Offer for the 7.375% Senior Secured Notes due 2022, with $347,016,000 in Existing Notes tendered, representing 99.15% of the outstanding total. The Exchange Offer expired on October 30, 2020, and the settlement is expected on November 3, 2020. The process involved consent from at least 90% of existing noteholders and the execution of a supplemental indenture to amend existing restrictive covenants. Noteholders received early participation payments if conditions were met by the early tender date.

Positive

• Successful exchange of $347,016,000 of Existing Notes tendered, improving liquidity and financial flexibility.
• Achieved over 90% consent from noteholders, allowing significant covenant modifications.

Negative

• The need for an exchange offer indicates underlying financial challenges.
• Significant reliance on noteholder cooperation raises concerns about future financing stability.

WASHINGTON, Nov. 2, 2020 /PRNewswire/ -- Urban One, Inc. ("Urban One" or the "Company") (NASDAQ: UONEK and UONE) announced today the final results of its offer to exchange (the "Exchange Offer") any and all of its outstanding 7.375% Senior Secured Notes due 2022 (the "Existing Notes") for new notes to be issued by the Company (the "New Notes") and the related consent solicitations (the "Consent Solicitation" and together with the Exchange Offer, the "Exchange Offer and Consent Solicitation") to adopt certain amendments (the "Proposed Amendments") to the indenture (the "Existing Notes Indenture") governing the Existing Notes that would eliminate substantially all of the restrictive covenants and certain of the default provisions contained in the Existing Notes Indenture, and to enter into a new intercreditor agreement among the Company, the trustee for the New Notes, the trustee for the Existing Notes, the collateral agent for the New Notes and the collateral agent for the Existing Notes. The Exchange Offer and Consent Solicitation expired at 11:59 p.m., New York City time, on October 30, 2020 (the "Expiration Date").

On the Expiration Date, requisite consents were received and a supplemental indenture was executed to effect the Proposed Amendments. The supplemental indenture and the new intercreditor agreement will become operative upon settlement of the Exchange Offer, which is expected to occur on November 3, 2020 (the "Settlement Date").

The Exchange Offer and Consent Solicitation was made pursuant to the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement (the "Offering Memorandum"), dated October 2, 2020, as amended by the press release dated October 16, 2020 (collectively, the "Offering Documents"), and were conditioned upon, among other things, the receipt of consents from eligible holders representing at least 90% of the outstanding aggregate principal amount of Existing Notes and the satisfaction or waiver of other conditions set forth in the Offering Memorandum. As of the Expiration Date, all conditions to the Exchange Offer and Consent Solicitation were satisfied.

As of the Expiration Date, an aggregate of $347,016,000 principal amount of Existing Notes had been validly tendered and not validly withdrawn as set forth in the table below:

Existing Notes Tendered at Expiration Date
Title of Series of Notes	CUSIP/ ISIN No.	Issuer	Principal Amount Outstanding	Principal Amount	Percentage
7.375% Senior Notes due 2022	75040P AS7/US75040PAS74	Urban One, Inc.	$350,000,000	$347,016,000	99.15%
	U74935 AF1/USU74935AF19

For each $1,000 principal amount of Existing Notes validly tendered (and not validly withdrawn) at or prior to the October 16, 2020 (the "Early Tender Date"), eligible holders are eligible to receive an early participation payment of $10.00 in cash (the "Early Tender Payment"). For each $1,000 principal amount of Existing Notes validly tendered and not validly withdrawn after the Early Tender Date, eligible holders are eligible to receive a participation payment of $5.00 in cash (the "Late Tender Payment"). The Early Tender Payment and Late Tender Payment will be paid on the Settlement Date for the Exchange Offer to the noteholder of record on the Early Tender Date or Late Tender Payment, as applicable, even if such noteholder is no longer the noteholder of record of such Existing Notes on the Settlement Date. In addition, for each $1,000 principal amount of Existing Notes validly tendered and not validly withdrawn prior to the Expiration Date, eligible holders are eligible to receive $1,000 principal amount of the New Notes (the "Exchange Consideration") on the Settlement Date. The total consideration consists of (a) the Exchange Consideration plus (b) the Early Tender Payment or the Late Tender Payment, as applicable, (collectively, the "Total Consideration"). Eligible holders who validly tendered (and did not validly withdraw) their Existing Notes will also receive accrued and unpaid interest in cash on their Existing Notes accepted for exchange to, but not including, the Settlement Date for the Exchange Offer.

After the Early Tender Date, tendered Existing Notes may have been withdrawn. Any holder who withdrew Existing Notes and subsequently re-tendered (and did not validly withdraw) such Existing Notes at or prior to the Expiration Date is entitled to the Late Tender Payment and Exchange Consideration components of the Total Consideration only.  

Available Documents and Other Details

The complete terms and conditions of the Exchange Offer and Consent Solicitation are set forth in the Offering Memorandum. This press release is for informational purposes only and is neither an offer to sell nor a solicitation of an offer to purchase the New Notes nor a solicitation of any consents in the Exchange Offer and Consent Solicitation. The Exchange Offer and Consent Solicitation are only being made pursuant to the Offering Memorandum, and this press release is qualified by reference to, the Offering Memorandum. The Exchange Offer was not being made to holders of Existing Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

Only noteholders who completed and returned an eligibility form confirming that they were either a "qualified institutional buyer" under Rule 144A, institutional accredited investors, as defined in SEC Rule 501(a)(1), (2), (3) and (7), or a non-U.S. person under Regulation S who is a "non-U.S. qualified offeree" (as defined in the eligibility form) for purposes of applicable securities laws were eligible to participate in the Exchange Offer and Consent Solicitation. Non-U.S. persons also may have been subject to additional eligibility criteria. Only holders of Existing Notes who certified that they satisfied one of the foregoing conditions were eligible to participate in the Exchange Offer. Persons who were not eligible holders may not receive and review the Offering Memorandum nor may they participate in the Exchange Offer.

The New Notes will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable securities laws and, unless so registered, the New Notes may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof.

The Exchange and Information Agent for the Exchange Offer and Consent Solicitation is D.F. King & Co., Inc. and can be contacted by sending an e-mail to urban1@dfking.com or calling 866-530-8623 or toll at (212) 269-5550.

About Urban One

Urban One, Inc. (urban1.com), together with its subsidiaries, is the largest diversified media company that primarily targets Black Americans and urban consumers in the United States. The Company owns TV One, LLC (tvone.tv), a television network serving more than 59 million households, offering a broad range of original programming, classic series and movies designed to entertain, inform and inspire a diverse audience of adult Black viewers. As of October 2020, Urban One currently owns and/or operates 61 broadcast stations (including all HD stations, translator stations and the low power television stations we operate) branded under the tradename "Radio One" in 14 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (blackamericaweb.com), the Company also operates syndicated programming including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show. In addition to its radio and television broadcast assets, Urban One owns iOne Digital (ionedigital.com), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its Cassius, Bossip, HipHopWired and MadameNoire digital platforms and brands. We also have invested in a minority ownership interest in MGM National Harbor, a gaming resort located in Prince George's County, Maryland. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences.

Forward-Looking Statements

Forward-looking statements in this press release regarding the Exchange Offer and Consent Solicitation and all other statements that are not historical facts, are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on assumptions believed by the Company to be reasonable and speak only as of the date on which such statements are made. Without limiting the generality of the foregoing, words such as "expect," "believe," "anticipate," "intend," "plan," "project," "will" or "estimate," or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements based on a number of factors, including but not limited to the following: the extent of the impact of the COVID-19 global pandemic or any other epidemic, disease outbreak, or public health emergency, including the duration, spread, severity, and any recurrence of the COVID-19 pandemic, the duration and scope of related government orders and restrictions, the impact on our employees, economic, public health, and political conditions that impact consumer confidence and spending, including the impact of COVID-19 and other health epidemics or pandemics on the global economy; the rapidly evolving nature of the COVID-19 pandemic and related containment measures, including changes in unemployment rate; the impact of political protests and curfews imposed by state and local governments; the cost and availability of capital or credit facility borrowings; the ability to obtain equity financing; general market conditions; the adequacy of cash flows or available debt resources to fund operations; and other risk factors described from time to time in the Company's Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports).

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SOURCE Urban One, Inc.

FAQ

What are the results of Urban One's Exchange Offer for UONEK and UONE?

Urban One successfully exchanged $347,016,000 of its 7.375% Senior Secured Notes due 2022, achieving a 99.15% tender rate.

When did Urban One's Exchange Offer expire?

The Exchange Offer expired on October 30, 2020.

What is the significance of the consent received by Urban One?

Urban One received consent from over 90% of the noteholders, allowing amendments to restrictive covenants in the Existing Notes Indenture.

When is the settlement date for the Exchange Offer by Urban One?

The settlement date for the Exchange Offer is expected to be November 3, 2020.