iHeartMedia Solvency Concerns Deepen

iHeartMedia Inc. has extended the deadline — for the fourth time — on a $14.6 billion distressed debt exchange offer after barely more than 1 percent of the notes had been swapped out as of Thursday.

According to mysanantonio.com, the deadline extension until May 26 at 4 p.m. is widely seen by debt analysts as giving the debt-laden company more time to discuss with lenders and bondholders ways to restructure most of the company’s debt before it decides to file for bankruptcy. The company’s debt stood at $20.4 billion as of March 31.

iHM is trying to refinance about $8.3 billion in bonds and about $6 billion in loans. As of Thursday, only 1.1 percent of the bonds, or $86.7 million, had been tendered, the company reported.

The debt-exchange offer, first issued on March 15, proposes mainly to delay maturities by two years and reduce the amounts of repayment at varying levels depending on the volume of debt that eventually is tendered.

“The investor response is limited at best,” said Patrice Cucinello, a Fitch Ratings Inc. analyst.

“This is an extensive restructuring of debt,” Cucinello said. “There’s a lot of different groups to negotiate with. It takes time to negotiate this. I don’t know how much longer it can go on.”

The company has $316.5 million in debt maturing this year, $324.2 million in 2018 but $8.4 billion in 2019. The company had $365 million in cash as of March 31. iHM warned last month that it might not last until February as a “going concern.”

The company warned investors April 20 that it may not survive the next 10 months. iHeart has generated negative cash flow over the last two years, meaning that it’s spending more money on its debt and other expenses than it’s generating.

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