iHeartMedia in Confidential Talks With Creditor Group

Highly leveraged iHeartMedia Inc. has started confidential talks with a group of lenders led by Pacific Investment Management Co., according to people familiar with the situation who asked not to be identified discussing a private matter.

Bloomberg reports private discussions typically involve crafting a debt-restructuring proposal that would be shared with a wider group of debtholders if a deal in principal is reached.

Various creditor groups have been created in recent months, setting the stage for potential battles between stakeholders, Bloomberg News previously reported. Investors have been on high alert for potential creditor infighting as an era of easy money weakened lender protections and left creditors with few options but to turn against each other for a better spot in the repayment line.

The radio-station owner had $5.2 billion of long-term debt as of March 31, after borrowings were cut by two-thirds during a Chapter 11 process that was completed five years ago. But iHeart continues to face pressure from ad-revenue declines in the sector. The firm has been receiving debt advice from PJT Partners.

iHeart plans to report quarterly results on Aug. 8.