Item 1.01. Entry into a Material Definitive Agreement
Indenture for 6.750% Senior Secured First-Lien Notes due 2026
On June 26, 2019, Cumulus Media New Holdings Inc. (the “Issuer”), a wholly owned subsidiary of Cumulus Media Inc. (the “Company”), entered into an indenture, dated as of June 26, 2019 (the “Indenture”), among the Issuer, the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, as trustee, governing the terms of the Issuer’s $500,000,000 aggregate principal amount of 6.750% Senior Secured First-Lien Notes due 2026 (the “Notes”). The Notes were issued on June 26, 2019.
The Notes were issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to persons outside of the United States pursuant to Regulation S under the Securities Act. The Notes are fully and unconditionally guaranteed by each of the Guarantors, subject to the terms of the Indenture. Other than certain assets secured on a first priority basis under the Issuer’s asset-based revolving credit facility (as to which the Notes are secured on a second-priority basis), the Notes and related guarantees are secured on a first-priority basis (subject to certain exceptions) by liens on substantially all of the assets of the Issuer and the Guarantors. The Guarantors consist of Cumulus Media Intermediate Inc., which is the Issuer’s direct parent, and each of the Issuer’s direct and indirect wholly-owned subsidiaries that guarantees the Issuer’s Credit Agreement, dated as of June 4, 2018, among the Issuer, certain of the Issuer’s other subsidiaries, the lenders named therein and Wilmington Trust, National Association, as administrative agent, which governs the Issuer’s senior secured term loan facility (the “Term Loan”).
The Notes and the related guarantees have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The Notes bear interest at a rate of 6.750% per year and will mature on July 1, 2026, subject to earlier repurchase or redemption in accordance with the terms of the Indenture.
The Issuer may redeem some or all of the Notes at any time, or from time to time, on or after July 1, 2022, at the following prices:
| | | | |
Year | | Price | |
2022 | | | 103.37500 | % |
2023 | | | 101.68750 | % |
2024 and thereafter | | | 100.00000 | % |
together with accrued and unpaid interest, if any, to, but excluding, the date of redemption. Prior to July 1, 2022, the Issuer may redeem up to 40% of the aggregate principal amount of the Notes from the proceeds of certain equity offerings at a redemption price of 106.750% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, the Issuer may redeem some or all of the Notes at any time, or from time to time, prior to July 1, 2022, at a price equal to 100.000% of the principal amount of the Notes to be redeemed plus the applicable “make-whole” premium plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. If the Issuer or its subsidiaries experience certain kinds of changes of control, the Issuer may be required to make an offer to repurchase the Notes at a price equal to 101.000% of the principal amount of the Notes plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
The Indenture contains covenants that, among other things, restrict the Issuer’s ability and the ability of its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain dividends, distributions, investments and other restricted payments, sell certain assets, agree to certain restrictions on the ability of restricted subsidiaries to make certain payments to the Issuer or any of its restricted subsidiaries, create certain liens, merge, consolidate or sell all or substantially all of the Issuer’s assets, enter into certain transactions with affiliates or designate subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications, including the suspension of certain of these covenants upon the Notes receiving investment grade credit ratings.
