Cumulus Media Inc. Friday announced that it has successfully completed its previously announced actions to pay down $175 million of debt using cash on hand.
Francisco J. Lopez-Balboa, Executive Vice President and Chief Financial Officer of CUMULUS MEDIA, said, “As the improvement in economic and public health conditions continues to drive momentum in business trends, we felt it appropriate to accelerate several debt repayments in order to expedite our balance sheet de-levering, reduce interest expense, and increase our free cash flow generation. We believe this better leverage and free cash flow profile, more than $200 million of available liquidity(1) and solid rebound trajectory are significantly enhancing our financial flexibility. Given our strong competitive position, proven execution track record, and numerous revenue growth drivers, we are confident in our multiple pathways to grow shareholder value.”
On May 17, 2021, the Company completed a $60 million repayment of its ABL Revolver due 2025, which represented the entirety of the amount outstanding under the facility. Following the paydown, the ABL Revolver due 2025 is undrawn and available as liquidity for general corporate purposes.
On May 25, 2021, the Company paid down approximately $89 million of its Term Loan Credit Facility due 2026 related to a mandatory prepayment obligation arising from the Company’s previously announced sale of land in Bethesda, MD, in June 2020 and sale of towers and related assets in September 2020.
Here’s a rundown of where the $175 million debt paydown came from:
Then on May 25 Cumulus paid down about $89 million on its term loan, which matures in 2026, using proceeds from a pair of asset sales the company made last year. About $65 million came from the June 2020 sale of 75 acres of prime real estate in Bethesda, MD that were home to the broadcast towers for WMAL Washington, DC. Another $23 million was from the sale of towers and related assets in September 2020. WMAL-FM now broadcasts from a tower in Germantown, MD at 105.9 FM. The 630 signal is now an ESPN Radio affiliate as “The Sports Capitol” WSBN.
Pursuant to the terms of its 6.75% Senior Secured First Lien Notes due 2026 (the “Notes”), on May 26, 2021, the Company launched a tender offer to repurchase approximately $26 million of the Notes at par, which represents the pro rata amount required to be offered from the proceeds of the Tower Sale. As of the expiration of the Tender Offer, approximately $3 million of Notes were validly tendered, accepted for payment and subsequently cancelled. Giving effect to the impact of the Tender Offer, approximately $450 million principal amount of Notes remains outstanding.
On June 24, 2021, the Company submitted an irrevocable paydown notice to the administrative agent of the Term Loan to effectuate a required paydown of $23 million, which represents the remainder of the initial amount of the Tender Offer that was not validly tendered prior to the expiration date. Holders of the Term Loan will receive their pro rata portion of such paydown on or around June 28, 2021.
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