Fitch Ratings Downgrades iHeartMedia's Credit Rating

iHeartMedia Inc.’s credit rating was cut by Fitch Ratings on concern that efforts to tame the struggling media company’s debt could lead to a distressed exchange or bankruptcy.

The San Antonio News-Express reports iHeartMedia is burning cash as it approaches a wall of repayments over the next two years, according to a Fitch report that reduced the long-term issuer default rating to CC from CCC. While a restructuring “is likely within a year or two,” Fitch said, negotiations with iHeartMedia’s senior lenders have become more difficult this year.

“The company has adequate liquidity to get past 2016, but it will likely need to execute on additional liquidity levers to get through 2018,” said Fitch, which added that iHeartMedia should be able to meet debt payments due Thursday. It has about $21 billion of debt outstanding, Fitch said.

Wendy Goldberg, a spokeswoman for iHeartMedia, declined to comment.

The company has asked some of its senior bondholders for modified terms that would make it easier to conduct a debt exchange, but some of those investors were told by their lawyer to resist. The deadline for the investors to respond was Friday.

iHM, the biggest U.S. radio broadcaster, is saddled with debt tied to its 2008 leveraged buyout by Thomas H. Lee Partners and Bain Capital, when iHeart was known as Clear Channel Communications Inc.