Item 1.01. Entry into a Material Definitive Agreement.
On July 25, 2019, Clear Channel Outdoor Holdings, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Barclays Capital Inc., as the representatives for the underwriters named in Schedule I thereto (the “Underwriters”), in connection with the offering of 100,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), sold by the Company (the “Offering”) at a public offering price of $3.50 per share. Under the terms of the Underwriting Agreement, the Company granted the Underwriters a30-day option to purchase up to 15,000,000 additional shares of Common Stock on the same terms.
The Underwriting Agreement contains customary representations, warranties, covenants and conditions. In the Underwriting Agreement, the Company agreed to indemnify the Underwriters against certain liabilities that could be incurred by them in connection with the Offering.
The Offering was made pursuant to an effective Registration Statement on FormS-3 (FileNo. 333-232517) filed with the Securities and Exchange Commission (the “SEC”) on July 2, 2019. A prospectus supplement relating to the Offering has been filed with the SEC. The Offering closed on July 30, 2019.
The Company received net proceeds from the Offering of approximately $333.5 million after deducting the underwriting discount and the estimated expenses of the Offering. The Company will use the net proceeds of the Offering, together with cash on hand, to redeem $333,475,000 aggregate principal amount of the 9.25% Senior Subordinated Notes due 2024 (the “CCWH Notes”) of Clear Channel Worldwide Holdings, Inc., a subsidiary of the Company (“CCWH”), on August 22, 2019.
The foregoing summary of the Underwriting Agreement is qualified in its entirety by reference to the Underwriting Agreement, which is attached as Exhibit 1.1 to this Report and is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement
On July 30, 2019, in connection with the closing of the Offering, the revolving loan agreement, dated as of May 1, 2019, among Clear Channel Outdoor, LLC and Clear Channel International, Ltd., subsidiaries of the Company, and iHeartCommunications, Inc. (“iHeartCommunications”), providing for a line of credit in an aggregate amount not to exceed $200 million from iHeartCommunications (the “iHeart Line of Credit”), was terminated. At the time of the termination of the iHeart Line of Credit, no borrowings were outstanding thereunder. There are no early termination penalties payable in connection with the termination of the iHeart Line of Credit.
Item 2.04.Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement.
On July 30, 2019, CCWH amended the conditional notice of redemption previously delivered to the holders of the CCWH Notes on July 23, 2019 to redeem a portion of the CCWH Notes. As amended, the conditional notice of redemption provides that CCWH will redeem $333,475,000 aggregate principal amount of the CCWH Notes on August 22, 2019 (the “Redemption Date”), pursuant to the terms of the indenture governing the CCWH Notes. The redemption price for the CCWH Notes will be 103% of the principal amount thereof, plus accrued and unpaid interest to the Redemption Date. CCWH’s obligation to redeem the CCWH Notes on the Redemption Date had been conditioned upon, among other things, the completion of the Offering. The conditions have been satisfied, and on the Redemption Date, the redemption payment of $333,475,000 aggregate principal amount of the CCWH Notes will become due and payable.
Item 8.01. Other Events.
On July 25, 2019, the Company issued a press release announcing that it had priced the Offering. A copy of the press release is furnished as Exhibit 99.1 to this Report and is incorporated herein by reference. Kirkland & Ellis LLP has issued an opinion, dated July 30, 2019, to the Company regarding certain legal matters with respect to the Offering, a copy of which is filed as Exhibit 5.1 hereto.
