iHM, Bondholders Making Mediation Effort

iHeartMedia Monday notified the SEC it will work until May 16 to try and resolve the dispute and to explore possible alternatives to the terms of the company's existing senior secured debt. iHM received Notices of Default (Notices) in March from the holders of at least 25% of the notes after the company moved Clear Channel Outdoor stock to a new subsidiary. Those Notices allege that iHM violated certain covenants under the indentures governing the Priority Guarantee Notes (Indentures).

 iHM believes the Contribution was made in full compliance with all of the provisions of the Indentures and the Holders have no basis to issue the Notices.

The Notices assert that the alleged defaults will become an "Event of Default" under the Indentures following the expiration of 60 days. An Event of Default, if it were to occur, would entitle the Holders to accelerate the underlying debt and would trigger events of default under the company's other material debt. As such, iHM filed a lawsuit in the State District Court in Bexar County, TX, against the Holders and received a temporary restraining order from the court preventing the defendants from taking any actions.

A group of 15 creditors including D.E. Shaw, Canyon Capital, Franklin Advisers and Franklin Mutual contended that the stock transfer constitutes a violation of debt covenants, and thus may accelerate the payment due date of up to $15 billion within 60 days of the notices.