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iHeartMedia Misses Interest Payment

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On February 1, 2018, iHeartCommunications, Inc., a subsidiary of iHeartMedia, Inc., announced that its Board of Directors has elected not to make a cash interest payment of $106 million, due February 1, 2018, to holders of its 14% senior unsecured notes due 2021 as active discussions continue among its lenders, noteholders and financial sponsors regarding a comprehensive debt restructuring. The decision will not trigger an event of default under the indenture as the Company will utilize a 30-day grace period.

On February  1, 2018, S&P Global Ratings lowered its corporate credit ratings on iHeartMedia Inc. and its subsidiaries to SD from CC, as well as iHeart’s 12%/14% senior notes due 2021 to D from C. According to S&P Global, the downgrade follows iHeart’s recent announcement that it did not make a $106 million net cash interest payment on its 12%/14% senior notes due 2021 that was due on February 1. S&P believes the nonpayment signals that a restructuring, either out of court or through an in court reorganization, is imminent. Read more on distressed companies.