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

[RadioGuy1864]

No 8K filing as of yet, which is odd. Certain deadlines came & went both last Friday (12/15) and yesterday (12/18).

Perhaps we'll see an 8K filing later today announcing an agreement-in-principle to restructure the debt has been reached between the company and majorities of each class of debt holders?

That's what I'm thinking. Everyone would like to settle this and move on, but that requires everyone to see the absolute reality of the situation. That's a tough ask.

 

[Kelly A]

That's what I'm thinking. Everyone would like to settle this and move on, but that requires everyone to see the absolute reality of the situation. That's a tough ask.

I think more likely any delays are just because of the holidays and vacations therein.

 

[Lefty61]

Given it is now 10 business days from the L1 extension deadline with no news, I conclude Audacy made good on L1 past due interest amounts and will make payment Thursday on the Dec interest payment.


And I also conclude there is a general L2 financial restructuring agreement that is subject to certain parameters in December and quarterly performance, that will likely fall apart in January when actual results become apparent and the Receivables liquidity accomodation expires Jan 7th.

 

[Lefty61]

Audacy finally pulls trigger on pre pack Chap 11 this morning, as reported by Insife Radio, interesting that they chose Texas for venue.

Audacy Files For Chapter 11 Bankruptcy Protection.
As expected, Audacy has begun prepackaged chapter 11 proceedings in U.S. Bankruptcy Court for the Southern District of Texas to restructure its balance sheet and reduce its total debt from $1.9 billion to $350 million. In a Sunday morning announcement, radio’s second largest ownership group says it has reached an agreement with a “supermajority” of its debtholders on a deleveraging transaction that will erase over 80% of the company’s debt, or roughly $1.6 billion, and “establish a robust capital structure to drive long-term growth.”

 

[Kelly A]

Audacy finally pulls trigger on pre pack Chap 11 this morning,

On a Sunday?

 

[TheBigA]

The company has set up a special site where it goes into more detail:

Announcement - Strengthening Audacy

Audacy Reaches Agreement with a Supermajority of its Debtholders on Balance Sheet Deleveraging Transaction that Will Equitize Over 80% of it's Debt

forward.audacyinc.com

The stock will continue to trade at least temporarily, David Field remains as CEO, the creditors get equity in the company.

 

[MarkW]

I agree such negotiations are likely ongoing. I suspect the sides are too far apart on terms and that a true prepack won't be possible.

I would be very surprised to see the 2L lenders awarded more of the equity than the 1L lenders. This company's cash flow maybe can support $300 million to $400 million in debt, and some of that will likely need to be unused revolver availability on day #1 post-reorg. The outstanding prepetition 1L debt (RCF + Term B2) is collectively more than double that range.

The 2L lenders, in my opinion, should be entitled to receive very little economic consideration (from a valuation standpoint) in a reorganization. Their *entire* position is "out of the money." The only reason they'd be tossed a bone is the nuisance value concept on which I pontificated a number of weeks back.

Indeed, I would love to know the valuations versus par of any recent 1st lien debt trades (I.e. did JPM actually unload its 1st lien paper?). Unfortunately, I believe that debt was a privately placed issuance, so I do not believe trade price info is publicly available.

Good guess on my part regarding opening debt load for the new co. Per today's press release, the company's plan of reorganization is proposing opening funded debt of approximately $350 million.

It appears I was wrong, however, about a true prepack not being possible. The press release from Audacy describes the filing as a prepackaged filing.

It will be interesting to see how much of the equity is proposed to be awarded to the RCF & Term B2 lenders (who are 1st lien) as compared to the 2027 & 2029 noteholders (who are 2nd lien).

 

[Kent]

The stock will continue to trade at least temporarily, David Field remains as CEO, the creditors get equity in the company.

If anyone buys penny stocks looking for potential quick payoffs, I think I'd skip this one!