Chase Bank Withdraws Audacy Line of Credit

JPMorgan Chase & Co. has stepped down from its role in covering struggling audio content provider Audacy’s defaulted loans should the company not be able to repay its debt.

The Philadelphia Business Journal reports Philadelphia-based Audacy said in a recent Securities and Exchange Commission filing that Chase, the nation’s largest bank, removed itself as the company’s letter of credit and swingline lender. A swingline loan is a short-term loan made by financial institutions that provides businesses with access to funds to cover debt commitments.

If Audacy failed to make payments, Chase would have been on the line to provide that swingline loan. The filing said Wilmington-based WSFS Financial Corp. will assume Chase’s former role.

Chase’s departure comes as Audacy is attempting to restructure $1.9 billion in debt and gain financial breathing room. The company said in an Oct. 27 SEC filing that it continues to have discussions with lenders to restructure its debt, a process that began in August.

Audacy recently missed a $17 million interest payment due Oct. 31 and a subsequent $785,592 payment due on Nov. 8. The bank sought and received a 30-day grace period, which was extended by 10 days and will come to a head next week in both cases.

In the recent filing, Audacy said that it made amendments to its 6.75% senior secured second-lien notes due 2029 and its 6.5% senior secured second-lien notes due May 1, 2027, extending the grace periods for interest payment defaults.

Audacy must find over $50 million in cash to cover different interest payments in the coming weeks. As of the end of its fiscal third quarter on Sept. 30, Audacy said it had $57.4 million in cash or cash equivalents. While Audacy has enough cash to cover the debt due next week, it still has more debt to pay down and has been losing money in recent years as advertising demand has fallen off since the pandemic began.

With quarterly losses mounting, Audacy said this past summer that it had deals in place to sell assets in Boston and Phoenix. If talks with its creditors fail, the company said at the time that a bankruptcy filing could be on the horizon. The company linked its declining advertising revenue to macroeconomic issues such as inflation. It noted that things are “to a large extent, outside our control” since lenders hold most of the cards with any potential restructuring.

Audacy has more than 220 radio stations across the country.