Together with Cognitive Credit

With 3Q25 reporting wrapping up, catch up on the latest numbers from the names you missed by requesting a complimentary model from any issuer in our High Yield & Investment Grade coverage.

Simply tell us which name you need to catch up on and we’ll send you a ready-to-use spreadsheet model structured and validated by our technology including 3Q25 numbers – so you can bypass manual data entry entirely and move directly to high-value analysis.

Why use our data?

● All data is sourced from official earnings reports and presentations

● Extracted accurately and automatically by machine-reading technology

● Validated algorithmically against accounting and financial relationships

● Verified by our analyst team to ensure unparalleled data integrity

● Updated models delivered within 15 minutes of earnings release

Cognitive Credit is the market's premier provider of fundamental credit data and analytics for credit investors. To see how we could transform your credit analysis workflow, request your demo today.

Welcome back everyone! We’re back with another restructuring case study piece.

Btw, we have several Cyber Monday related offers so keep an eye out for an email tomorrow that goes into more detail about our offers. This includes 20% off HYH Premium.

Let’s get into it.

iHeartMedia’s Radio Empire and the Two-Track 2024 Restructuring Plan

From Airwaves Dominance to Distress: iHeartMedia, Inc. grew into America’s largest radio broadcaster over decades, with roots dating back to a single FM station purchase in San Antonio in 1972. By the 2000s, they had amassed hundreds of stations nationwide. In 2008, private equity sponsors Bain Capital and Thomas H. Lee took this radio giant private in a $17bn leveraged buyout. That deal closed just as the financial crisis hit, and iHeart’s traditional radio advertising model soon faced intensifying competition from digital streaming platforms such as YouTube. The company’s debt burden proved unsustainable. By 2017, iHeartMedia was spending $1.4bn annually on interest alone, and it faced over $8bn of debt maturing by the end of 2019. Unable to “grow into” its capital structure, iHeart filed for Chapter 11 bankruptcy in March 2018, seeking to halve its $20 billion debt load. The restructuring deal cut iHeart’s debt by more than 50% as senior secured creditors owed ~$13bn accepted $5.6bn of new debt plus 94% of the reorganized equity. These creditors also took 89.5% of iHeart’s stake in Clear Channel Outdoor (a billboard subsidiary) as part of their recovery. Junior bondholders (over $2bn of claims) received only 5% of equity plus $200mm in new notes, while pre-petition shareholders were virtually wiped out. Through this bankruptcy, iHeartMedia “right-sized” its balance sheet, emerging in 2019 with roughly $5.5–6 billion of debt (the new loans and notes) and a second chance as a public company.

Post-Restructuring Performance and Renewed Strains: Relieved of a large portion of its debt, iHeart aimed to capitalize on its multi-platform reach (849 radio stations and a growing digital/podcast presence). However, secular headwinds and new economic shocks continued to pressure performance. The COVID-19 pandemic in 2020 devastated radio advertising, and although 2021–2022 saw a rebound, by 2023 the company was again underperforming expectations. Full-year 2023 revenue was $3.75bn, 4% below 2022, and Adjusted EBITDA fell to $697mn, a steep drop from $950mm the year prior. This is expected due to artificially high numbers during election years, although the drop still reduced the company’s ability to service its debt. iHeart also recorded a significant $965 million impairment in 2023, reflecting diminished value of its goodwill and FCC licenses amid the industry’s challenges. Consequently, 2023 ended with a $797mm GAAP operating loss. Meanwhile, debt reduction efforts lagged behind earnings erosion. Management touts a long-term goal of ~4× net leverage, but actual leverage remained far higher. As of year-end 2023, iHeart carried about $5.2bn of net debt against $697mm  EBITDA (roughly 7.5× leverage) – nearly double the targeted level. The company’s interest expense, while far below the pre-2018 peak, is still substantial at an estimated $400mm+ per year, consuming a large share of adj. EBITDA, a problem that becomes drastically worse considering the aggressive adjustments embedded in adj. EBITDA. iHeart took steps to trim its debt load by repurchasing notes at a discount (from Q2 2022 to Q4 2023 it bought back $534mm of notes for $447mm cash, cutting annual interest by ~$45mm). These opportunistic buybacks reduced the outstanding unsecured bond principal from $1.45bn to about $0.9bn. Even so, by 2024 the company faced a “maturity wall” looming in 2026–2027 and persistent advertising market uncertainty. With over $4 billion of debt coming due by 2026–27 (detailed below), iHeart’s capital structure was again at risk. Excessive leverage and declining EBITDA raised doubts about refinancing the debt in full. This precarious situation set the stage for iHeart’s 2024 out-of-court restructuring gambit.

Capital Structure as of September 30, 2024

iHeartMedia’s capital structure (post-2019 emergence) consists of a secured bank facility, several series of secured notes, and one series of unsecured notes – collectively $5.2bn outstanding as of Q3 2024. All material debt is issued or borrowed by iHeart’s main operating subsidiary, iHeartCommunications, Inc. (the “Issuer”), and guaranteed by its parent holding company (iHeartMedia Capital I, LLC) and substantially all restricted subsidiaries. The secured debt includes a $2.26 billion Term Loan (first lien term loan under a 2019 credit agreement, maturing May 1, 2026), as well as three series of senior secured notes:

• $800mm of 6.375% Senior Secured Notes due 2026 (the “Secured 2026s”);
  

• $750mm of 5.25% Senior Secured Notes due 2027 (the “Secured 2027s”);
  

• $500mm of 4.75% Senior Secured Notes due 2028 (the “Secured 2028s”).
  

In addition, iHeartCommunications has $916 million of 8.375% Senior Unsecured Notes due 2027 outstanding. The Term Loan and all Secured Notes rank pari passu and share the same collateral package. Specifically, the secured debt is first-lien on essentially all assets of the Issuer and its guarantors, including the stock of the Issuer’s subsidiaries and substantially all tangible and intangible assets – except for receivables and related assets pledged under a separate asset-based revolver. (Those receivables constitute the borrowing base for iHeart’s Asset-Based Loan (ABL) revolver, a secured facility that had $425.7mm of availability and was undrawn as of Sept. 30, 2024. The term loan and secured notes have a junior second lien claim on the ABL collateral, while the ABL lenders hold a first-priority lien.) In practical terms, iHeart’s Term Loan and Secured Bonds function as a single first-lien class from a collateral perspective. All share in the same collateral value, and all are guaranteed by the same entities, differing primarily in interest rate and maturity.

The capital structure that emerged from the 2018–19 bankruptcy was expected to be more sustainable, but by 2024 it became evident that deleveraging had stalled. Net debt remained above $5bn, while cash generation was modest (only $110mm of FCF in 2023). With maturities approaching, notably the term loan and Secured 2026 Notes due in less than two years, the company’s refinancing options were constrained by high leverage and rising interest rates. In this context, iHeartMedia turned to a dual-track liability management transaction in late 2024, aiming to push out maturities and improve its balance sheet outside of bankruptcy.

To request the iHeart model from Cognitive Credit, go here.

The 2024 Transaction Support Agreement: Extending $4 Billion of Debt

In November 2024, iHeartMedia announced a sweeping refinancing plan via a Transaction Support Agreement (TSA) with a majority of its creditors. The TSA’s goal was to extend over $4bn of upcoming debt maturities by roughly three years. It offered all holders of iHeart’s loans and bonds the opportunity to exchange into new longer-dated debt, with two possible deal structures defined in the agreement. Critically, the chosen structure depends on creditor participation levels. The two pathways, dubbed the “Comprehensive Transaction” and the “Alternative Transaction”, are launched concurrently as exchange offers, but only one will be consummated based on the thresholds achieved. In essence, iHeart and its sponsor group prepared a dual-track restructuring: if near-unanimous consent is attained, a global deal amends and extends the existing debt; if not, a fallback plan will transfer assets to new entities (a “drop-down” structure) to secure new debt for consenting creditors, leaving holdouts behind.

Comprehensive Exchange (95% Participation Scenario)

The Comprehensive Transaction is implemented if holders of at least 95% of each class of iHeart’s existing loans and notes agree to participate. Under this high-consent scenario, iHeart can effect sweeping amendments to its debt documents, essentially executing an “uptier exchange” that rolls all major debt into new secured instruments at the parent level (iHeartCommunications). Each tranche of debt would be exchanged into a new series of longer-dated debt with a higher or equivalent rank. The face values of all tranches would be reduced.

• The $2.26bn Term Loan (due 2026) would convert into a new Term Loan due May 2029. Participating term lenders also receive a small upfront cash pay-down (5% of par) as an early tender incentive. They would receive  $940 principal amount of New 1L Term Loans and $50 of cash per $1,000 principal amount of Existing Term Loans validly exchanged.

• The $800mm Secured 2026 Notes would be exchanged into 9.125% Senior Secured Notes due 2029 (again with ~5% cash consideration for early tenders).They would receive  $940 principal amount of New 1L 2029 Secured Notes and $50 of cash per $1,000.

• The $750mm Secured 2027 Notes would become 7.75% Senior Secured Notes due 2030. They would receive $880 principal amount of New 1L 2030 Secured Notes per $1,000 principal amount of 2027 Secured Notes.

• The $500mm Secured 2028 Notes would be exchanged into 7.00% Senior Secured Notes due 2031. They would receive $790 principal amount of New 1L 2031 Secured Notes per $1,000 principal amount of 2028 Secured Notes.

• The $916mm Unsecured 2027 Notes, which are junior in the current structure, would be upgraded (through collateral) into 10.875% Second-Lien Senior Secured Notes due 2030. In the comprehensive deal, these formerly unsecured creditors receive second-lien security in the collateral pool (behind the new first-lien notes/loans), plus a higher coupon to compensate for their junior lien status. They would receive   $790 principal amount of New 2L Secured Notes per $1,000 principal amount of Unsecured Notes.

This across-the-board debt exchange substantially extends iHeart’s maturities (pushing 2026–28 debts out to 2029–31) and increases coupon rates for most tranches to incentivize creditor support. The transaction is designed to be all-inclusive – all holders of the relevant debt instruments may participate on the same terms. Crucially, if the 95% per class threshold is met, iHeart can utilize collective action provisions to neutralize any holdouts. The TSA stipulates that each existing debt indenture and credit agreement will be amended (with the consents from ≥95% in each class) to strip covenants and eliminate collateral or guarantee claims for any remaining non-tendering holders. In other words, holdouts would be left with effectively orphaned debt: their old loans or notes would become unguaranteed, unsecured, and covenant-lite obligations, greatly diminishing their value and priority. For example, the liens securing the existing Secured Notes would be released and the parent guarantees terminated, once the exchange closes. This threat of “covenant stripping” is a powerful inducement for creditors to tender – those who refuse would find their credit protections gone. Moreover, the TSA contains an intercreditor mechanism to deal with any stray term loan lenders who do not participate: any recoveries or payments to non-participating term lenders would be subject to a turnover, for the benefit of the new (participating) debt. In effect, holdout term loan claims would be subordinated in right of payment to the new exchange term loans, ensuring that cooperating lenders come first. Together, these features make the Comprehensive Exchange highly coercive: if enough creditors sign on, the deal can steamroll the few that don’t.

Alternative “Drop-Down” Transaction (If <95% Participation)

The rest of the piece (4,000+ more words) is going to be for our HYH Premium audience. Through Cyber Monday, we are running a 20% off discount for our annual plan. Access includes our credit recruiting materials, city guides, and our business/restructuring case studies.

Subscribe to Premium to read the rest.