iHM Discloses Negotiation Details as Trial Begins

iHeartMedia Inc. disclosed details of its negotiations with lenders on ways to manage its debt and cut its interest costs as the struggling radio broadcast seeks to end a pending creditor lawsuit.

Bloomberg reports the broadcaster and advertising company said the two parties are negotiating what types of cash transfers are allowed among subsidiaries as well as other debt terms, according to company filings. iHeartMedia said early this month that it was in mediation with a small group of its senior bondholders.

Under the proposals issued by the company and its creditors, the primary dispute is over the use of iHM’s unrestricted units for financing “without restraint” and the company’s desire for “additional asset carveouts,” Citigroup Inc. analyst David Phipps wrote in a research note Monday.

In the proposal from lenders on May 13, the creditors asked iHeartMedia to “limit all future dispositions to within credit group,” meaning cash transfers among subsidiaries would be restricted.

The company countered in a proposal on May 15, saying that it wants to exclude its Clear Channel Outdoor unit, or CCO, from those restrictions, requesting that the clause “does not limit CCO’s ability to use unrestricted subsidiaries under its financing agreements.”

The two parties, which have signed non-disclosure agreements, are also negotiating a number of terms including an interest rate reduction, an extension of the maturity of the debt as well as certain milestones the company needs to reach in order to be allowed to pay down more junior debt, according to the filings.