• Get involved.
    We want your input!
    Apply for Membership and join the conversations about everything related to broadcasting.

    After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
    If you use a disposable or false email address, your registration will be rejected.

    After your membership is approved, please take a minute to tell us a little bit about yourself.
    https://www.radiodiscussions.com/forums/introduce-yourself.1088/

    Thanks in advance and have fun!
    RadioDiscussions Administrators

Audacy granted a 30 day extension to make its missed bond payment

M

MarkW

This 8-K filing was posted this morning in reference to the interest payment that originally came due October 1 on its 2029 notes:


Not surprisingly, the company is also going to exercise the 30 day grace period with regard to the payment due November 1 on its 2027 notes.

The 2029 notes' grace period now expires November 29. The 2027 notes' grace period expires November 30.
 
Looks like they are choosing not to make the interest payment due tomorrow on its 1st lien credit agreement with JPM Chase, either.

The grace period under that Credit Agreement is evidently only 3 business days.

I suspect JPM Chase, like the trustee for the 2029 Notes, will amend or forbear this week to effectively extend its payment deadline to November 29. If they choose not to do so, then Audacy will need to make the interest payment in order to avoid BK. If JPM Chase as a 1st lien secured creditor as a goodwill gesture were to allow a deferral of its payment beyond the current grace period, it presumably would mean it is satisfied with whatever restructuring proposal the company is crafting and wishes to induce the second lien lenders to continue to "play nice" in an effort to work toward a prepackaged plan of reorganization.

Of note, the extension granted by Deutsche as to the 2029 Notes does contain a right to accelerate if an Event of Default arises under any other debt instrument (such as the JPM Chase Credit Agreement). Such a provision is a fairly standard one.

If JPM Chase does not extend or forbear, then I would interpret that as a sign it is growing impatient with Audacy and its professional representation and wants to bring things to a head sooner rather than later.
 
Last edited:
MarkW said:
This 8-K filing was posted this morning in reference to the interest payment that originally came due October 1 on its 2029 notes:


Not surprisingly, the company is also going to exercise the 30 day grace period with regard to the payment due November 1 on its 2027 notes.

The 2029 notes' grace period now expires November 29. The 2027 notes' grace period expires November 30.
Click to expand...
I don't see the doom or gloom in this 8K. It's just indicating that Audacy is exercising its option for an extension.
Without being privy to what's going on behind the scenes, anything else amounts to wild speculation. So far past posts have speculated that Audacy would be filing bankruptcy by now, so the reputation for accuracy with the guesses hasn't proven true yet..
 
Kelly A said:
I don't see the doom or gloom in this 8K. It's just indicating that Audacy is exercising its option for an extension.
Without being privy to what's going on behind the scenes, anything else amounts to wild speculation. So far past posts have speculated that Audacy would be filing bankruptcy by now, so the reputation for accuracy with the guesses hasn't proven true yet..
Click to expand...
I’m pretty sure the Fields will exercise every option humanly possible before declaring BK. I’d be surprised to see how they eventually avoid it, but they still have time to rearrange the deck chairs.
 
I think the question I have is can they do a reorganization without bringing in the courts and blowing things up for a formal bankruptcy? Is there precedent for something like that? It's outside my experience. Everybody involved knows what's going on. The only reason you need a judge is if there's a disagreement. I'm pretty sure the creditors don't want to blow things up, and they don't want to own radio stations. They just want to know when they're going to get paid.
 
TheBigA said:
I'm pretty sure the creditors don't want to blow things up, and they don't want to own radio stations. They just want to know when they're going to get paid.
Click to expand...
Exactly, and I'm sure the Audacy Board, along with the corporate staff/Fields know that. This gives Audacy a little more leeway than your average manufacturing company with hard assets that could be liquidated at a decent price. Technically not 'owning' a license to do radio has always been an asset valuation problem unique to broadcasting. Any hard assets like real estate, office, studio, and transmission hardware have undoubtedly devalued to the point where the sum total isn't worth the effort.
 
TheBigA said:
I think the question I have is can they do a reorganization without bringing in the courts and blowing things up for a formal bankruptcy? Is there precedent for something like that?
Click to expand...
Yes, such things do happen.

Bed Bath and Beyond and Rite Aid both had out-of-court restructurings last November/December. Both of them eventually filed bankruptcy anyway.

TheBigA said:
The only reason you need a judge is if there's a disagreement.
Click to expand...
Or you wish to take advantage of certain provisions of the bankruptcy code, like rejecting contracts with landlords or labor unions.
 
PTBoardOp94 said:
Yes, such things do happen.

Bed Bath and Beyond and Rite Aid both had out-of-court restructurings last November/December. Both of them eventually filed bankruptcy anyway.
Click to expand...
Retail with super high overhead, like expensive mall leases, is different than radio station groups.
PTBoardOp94 said:
Or you wish to take advantage of certain provisions of the bankruptcy code, like rejecting contracts with landlords or labor unions.
Click to expand...
Again, some on this site predicted Audacy would be bankrupt by now. Hasn't happened.
 
PTBoardOp94 said:
Or you wish to take advantage of certain provisions of the bankruptcy code, like rejecting contracts with landlords or labor unions.
Click to expand...

The interesting part is they've continued to operate normally, extending contracts with unions, vendors, and employees.

That's why I think they're trying to reorganize debt without completely blowing everything up.
 
New 8-K posted this morning.

By way of an Amendment No. 8 to Credit Agreement, JPM Chase has granted an 8 business day extension to its original 3 business day grace period for the 1st lien Credit Agreement interest payment due October 31.

This effectively means the interest payment originally due October 31 now comes due November 15.

Cross-default language for the Receivables Purchase Facility led by DZ Bank AG was amended accordingly to correspond to the above timeframe.

I am somewhat surprised the JPM Chase did not extend its grace period to November 29 to match expiry of the grace period as to the 2029 Notes. It is unclear to me why JPM Chase would only wish to extend by approximately two weeks. The November 15 date interestingly is 1 day after the 10-Q filing for the fiscal quarter ended September 30 comes due. It will be interesting to see if Audacy posts that document on time.

Notably, Amendment No. 8 does contain a waiver of the Consolidated Net First Lien Leverage Ratio test for the test period ended September 30, so if Audacy ultimately performs the missed interest payment under its 1st lien Credit Agreement, it will continue to benefit from that accommodation beyond the November 15 payment grace period expiry.

What this all suggests to me is JPM Chase is willing to give Audacy additional time to negotiate with other creditors so long as (a) it gets paid its interest by November 15 and (b) no troublesome surprises arise with regard to September 30's financial disclosures. It's odd that JPM Chase didn't require performance of the interest payment as a condition precedent to granting the leverage ratio waiver at September 30.

 
Last edited:
Let’s say Audacy goes straight down in flames. What happens to the active stations. Auction? Who could pick them up.
 
Don CT said:
Let’s say Audacy goes straight down in flames.
Click to expand...
What does that mean? Just like any company, they're afforded various remedies including filing to reorganize under bankruptcy.
Several media companies that have been publicly traded have been de-listed. Doesn't mean they're at death's door.
I don't see a situation where Audacy would be required to liquidate.
 
Kelly A said:
What does that mean? Just like any company, they're afforded various remedies including filing to reorganize under bankruptcy.
Several media companies that have been publicly traded have been de-listed. Doesn't mean they're at death's door.
I don't see a situation where Audacy would be required to liquidate.
Click to expand...
If they run out of money, can’t pay their bills and get liquidated. What does the FCC do. Is there a protocol for the licenses.
 
Don CT said:
If they run out of money, can’t pay their bills and get liquidated. What does the FCC do. Is there a protocol for the licenses.
Click to expand...
But your question is predicated on an unlikely hypothetical scenario in this case. The FCC doesn't get involved in things like asset liquidations. Assuming the stations could no longer be operated under the licensee, a bankruptcy court would assign a 'receiver' to keep the properties operational and viable so they could be sold off. The Commission would be involved in reviewing the qualifications of the receiver, and any sales would have to be approved by the FCC and other government agencies, depending on the proposed or existing corporate structure.
Other than loan obligations, I've not seen any indication Audacy isn't, or won't be able to continue paying their bills.
 
Kelly A said:
But your question is predicated on an unlikely hypothetical scenario in this case. The FCC doesn't get involved in things like asset liquidations. Assuming the stations could no longer be operated under the licensee, a bankruptcy court would assign a 'receiver' to keep the properties operational and viable so they could be sold off. The Commission would be involved in reviewing the qualifications of the receiver, and any sales would have to be approved by the FCC and other government agencies, depending on the proposed or existing corporate structure.
Other than loan obligations, I've not seen any indication Audacy isn't, or won't be able to continue paying their bills.
Click to expand...
Would the FCC have to adjust the ownership caps if let's say 500 licenses went up for grabs.

Lets go a step further. If the radio industry collapses and the advertising drys up. What happens to the band. How many stations are just left to go dark. How long can this be propped up if there is no money in it.
 
From what I see, we're talking about roughly $18 million. They have that money on hand. This is about negotiating, not liquidation.
 
Don CT said:
Lets go a step further. If the radio industry collapses and the advertising drys up. What happens to the band. How many stations are just left to go dark. How long can this be propped up if there is no money in it.
Click to expand...
That's an apocalyptic hypothetical that can't be answered. Can you tell the future? To use a practical viewpoint in the case of the AM band and the direction it seems to be going; the spectrum/band is completely useless and undesirable for anything else. If in a doomsday scenario as you mentioned, all the AM broadcasters went away, the band would just likely be unused.
The big difference between government-funded broadcasting like in Europe and Asia, is U.S. broadcasters are self-supporting, some via selling advertising and others through listener donations. Depending on the funding source, I suppose stations and their associated businesses just go away. Look at the SW band. To me, there's a good example of what happens when financial support and listeners no longer pay the bills.
 
Status
This thread has been closed due to inactivity. You can create a new thread to discuss this topic.


Back
Top Bottom