Item 1.01. Entry into a Material Definitive Agreement
Indenture for 6.500% Senior Secured Second-Lien Notes due 2027
On April 30, 2019, Entercom Media Corp. (formerly CBS Radio Inc.) (the “Issuer”), a wholly owned subsidiary of Entercom Communications Corp. (the “Company”), entered into an indenture, dated as of April 30, 2019 (the “Indenture”), among the Issuer, the guarantors named therein (the “Guarantors”) and Deutsche Bank Trust Company Americas, as trustee and as notes collateral agent, governing the terms of the Issuer’s $325,000,000 aggregate principal amount of 6.500% Senior Secured Second-Lien Notes due 2027 (the “Notes”). The Notes were issued on April 30, 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 secured on a second-priority basis by liens on substantially all of the assets of the Issuer and the Guarantors and will be fully and unconditionally guaranteed, jointly and severally, on a senior secured second-priority basis by each of the Guarantors. The Guarantors consist of each of the Issuer’s direct and indirect subsidiaries that guarantees the Issuer’s Credit Agreement, dated as of October 17, 2016, among the Issuer, as borrower, the guarantors named therein, the lenders named therein, and JPMorgan Chase Bank, N.A., as administrative agent, which governs the Issuer’s revolving credit facility (the “Revolver”) and senior secured term loan facility (the “Term Loan” and, together with the Revolver, the “Senior Credit Facilities”).
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 6.500% per year. Interest on the Notes is payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2019. The Notes will mature on May 1, 2027, 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 May 1, 2022, at the following prices:
| | | | |
Year | | Notes
percentage | |
2022 | | | 104.875 | % |
2023 | | | 103.250 | % |
2024 | | | 101.625 | % |
2025 and thereafter | | | 100.000 | % |
together with accrued and unpaid interest, if any, to, but excluding, the date of redemption. Prior to May 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 106.500% 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 May 1, 2022, at a price equal to 100% 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 accompanied by a decline in the rating of the Notes, the Issuer may be required to make an offer to repurchase the Notes.
The Indenture contains covenants that, among other things, restrict the Company’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, enter into sale and leaseback transactions, agree to certain restrictions on the ability of restricted subsidiaries to make certain payments to the Company or any of its restricted subsidiaries, create certain liens, merge, consolidate or sell all or substantially all of the Company’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.
