| Item 1.01 | Entry into a Material Definitive Agreement. |
Indenture Governing 9.000% Senior Secured Notes Due 2028
On August 22, 2023, Clear Channel Outdoor Holdings, Inc. (the “Company”) completed the sale of $750 million in aggregate principal amount of 9.000% Senior Secured Notes due 2028 (the “Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the United States in compliance with Regulation S under the Securities Act. The Notes were issued pursuant to an indenture, dated as of August 22, 2023 (the “Indenture”), among the Company, the subsidiaries of the Company acting as guarantors party thereto (collectively, the “Guarantors”) and U.S. Bank Trust Company, National Association, as trustee and as collateral agent.
The Notes mature on September 15, 2028 and bear interest at a rate of 9.000% per annum. Interest on the Notes is payable to the holders thereof semi-annually on March 15 and September 15 of each year, beginning on March 15, 2024. The Notes are guaranteed fully and unconditionally on a senior secured basis by the Guarantors and any of the Company’s future wholly-owned domestic subsidiaries that guarantee the Company’s obligations under the Company’s senior secured term loan facility (the “Term Loan Facility”), its senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”) and its receivables-based credit facility (the “ABL Facility”).
The Notes and the guarantees are secured on a first-priority basis by security interests in all of the Company’s and the Guarantors’ assets securing the Senior Secured Credit Facilities and the Existing Secured Notes (as defined below) (other than the assets securing the ABL Facility on a first-priority basis), subject to certain exceptions, on a pari passu basis with the liens on such assets (such assets, other than accounts receivable and certain other assets securing the ABL Facility on a first priority basis, the “Notes Priority Collateral”), and on a second-priority basis by security interests in all of the Company’s and the Guarantors’ assets securing the Company’s ABL Facility on a first-priority basis (the “ABL Priority Collateral” and, together with the Notes Priority Collateral, the “Notes Collateral”), in each case, other than any excluded assets set forth in the Indenture and subject to intercreditor agreements. The ABL Facility is secured on a second-priority basis by the Notes Priority Collateral.
The Notes and the guarantees are general senior secured obligations of the Company and the Guarantors and rank pari passu in right of payment with the Company’s and the Guarantors’ existing and future senior indebtedness, including the Senior Secured Credit Facilities, the ABL Facility, the 5.125% senior secured notes due 2027 (the “Existing Secured Notes”), the 7.750% senior notes due 2028 and the 7.500% senior notes due 2029 and will be senior in right of payment to all existing and future subordinated indebtedness of the Company and the Guarantors. The Notes are effectively equal to all of the Company’s and the Guarantors’ existing and future indebtedness secured by a first-priority lien on the Notes Priority Collateral (including the Senior Secured Credit Facilities and the Existing Secured Notes), to the extent of the value of such collateral, are effectively subordinated to all of the Company’s and the Guarantors’ existing and future indebtedness secured by a first-priority lien on the ABL Priority Collateral (including the ABL Facility), to the extent of the value of such collateral, and are structurally subordinated to any existing and future indebtedness and other liabilities, including preferred stock, of existing and future subsidiaries of the Company that do not guarantee the Notes, including Clear Channel International B.V.’s 6.625% senior secured notes due 2025.
The Company may redeem all or a portion of the Notes beginning on September 15, 2025 at the redemption prices set forth in the Indenture. Prior to September 15, 2025, the Company may redeem all or a portion of the Notes at a redemption price equal to 100.000% of the principal amount of the Notes, plus the “make-whole” premium described in the Indenture. The Company may redeem up to 40% of the aggregate principal amount of the Notes at any time prior to September 15, 2025 using the net proceeds from certain equity offerings at 109.000% of the principal amount of the Notes. During any twelve-month period prior to September 15, 2025, subject to certain exceptions and conditions, the Company may also redeem up to 10% of the then-outstanding aggregate principal amount of Notes at a redemption price equal to 103.000% of the aggregate principal amount of the Notes being redeemed; provided that, at the time of any such redemption, there are no outstanding borrowings under the Senior Secured Credit Facilities (including any amounts drawn under any revolving credit facility or other borrowings outstanding in respect of any term loans), and no such redemption can be made with the proceeds of any indebtedness that refinances existing indebtedness. If the Company experiences certain specific types of changes in control, the Company must offer to repurchase all of the notes at 101.000% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
