BloombergBusiness is reporting iHM would sell securities in one of its units to retire $1.4 billion of bonds the parent is responsible for paying, said the person, asking not to be identified because the discussions are private. iHM, which is discussing the plans with its private equity owners, would offer existing debtholders the option to exchange into new obligations from a subsidiary called Broader Media LLC, the person said. Creditors would receive higher-ranked claims on some of IHM’s assets than they have now.
IHeartMedia is also discussing an alternative plan to use proceeds from a Broader Media security sale to purchase the parent company’s bonds in the open market, the person said. The company, owned by Bain Capital Partners and Thomas H. Lee Partners, is looking to take advantage of low market prices for its debt, the person said.
The business was bought by Bain and Thomas H. Lee in July 2008 in one of the last mega leveraged buyouts before the credit crisis. The firms paid $24 billion for the radio and billboard company that spawned iHM, formerly known as Clear Channel Communications Inc. and has been battling ever since under the debt taken on for that deal.
The deal now being discussed would take care of borrowings coming due before 2019, when the company runs into a wall of $8.3 billion in senior debt, 40 percent of total obligations. iHM has been tapping healthier divisions as it seeks to boost cash at the parent company -- which is responsible for paying back three-quarters of total borrowings -- and units it controls.
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