Struggling under a $20 billion debt burden, San Antonio, Texas-based iHeartMedia Inc. said its subsidiary, iHeartCommunications Inc., has decided to not make a $106 million interest payment to its creditors, the company said this week.
iHeartMedia, previously known as Clear Channel Communications, is the parent of iHeartRadio, which owns eight Los Angeles area radio stations including KBIG FM 104.3, KIIS FM 102.7, and KOST FM 103.5.
According to a filing with the Securities and Exchange Commission, iHeart said under the terms of the loan, the company has 30 days to pay the amount, or reach a deal with creditors, before triggering a default. But if it does neither by the end of the grace period, it will trigger a default event, according to iHeart. The interest payment was due Feb. 1, and the loan is coming due in 2021.
Should iHeart trigger a default, the lenders could call the loan to be paid immediately could move to take the assets that iHeart used to secure the loan. Additionally, defaulting could trigger defaults of other obligations, iHeart said.
iHeart also said it has been negotiating with creditors to restructure its debt, which, according to its most recent report for the quarter ended Sept. 30, totals about $20 million.
Media and entertainment reporter Diane Haithman can be reached at firstname.lastname@example.org. Follow her on Twitter @dhaithman.