iHM Hires Firm To Manage Debt

iHeartMedia Inc has hired Moelis & Co as a financial advisor, in the most significant step yet by the largest owner of U.S. radio stations to deal with its $21 billion debt pile, according to people familiar with the matter.

Private equity-owned iHeartMedia has asked Moelis to review offers made by about a minority of the company's senior creditors that could potentially make the terms of some of its debt more attractive, the people said this week.

Reuters reports were iHeartMedia to accept one of these offers, it could reduce the value of its debt and the interest it pays on it, though it could also end up treating its junior creditors less favorably, the people added.

The sources asked not to be identified because the deliberations are confidential. iHeartMedia, which is also the majority owner of U.S. billboard operator Clear Channel Outdoor Holdings Inc (CCO.N), and Moelis declined to comment.

iHM Battles Bondholders Over Stock Transfer

Meanwhile, iHeartMedia said one of its divisions received notices of default.

A group of IHeartMedia Inc. creditors are going to battle with the debt-laden radio broadcaster over its decision to reduce the lenders’ hold on $500 million in assets by moving them from the parent company to a unit.

iHM said it received notices of default from its bondholders, according to a filing Monday. Bloomberg reports the lenders claim that the company violated debt covenants by transferring the shares of Clear Channel Outdoor Holdings Inc. to its Broader Media LLC in December. The creditors represent at least 25 percent of the outstanding principal of four of the company’s priority guarantee notes.

The broadcaster said it objects to the allegations and will contest the validity of the notices. The company filed a lawsuit Monday in state district court in Bexar County, Texas, to seek a declaratory judgment that it’s not in default.

iHM, the nation’s largest owner of radio stations with 245 million monthly listeners, is struggling to rein in debt it took on in its 2008 acquisition by private equity firms Bain Capital Partners LLC and Thomas H. Lee Partners LP, a $24 billion deal that came to symbolize the excesses of the pre-crisis buyout boom. Pandora Media Inc., Spotify Ltd. and Apple Inc. have lured away millions of listeners since then with online radio and on-demand downloads.

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