| Item 1.01 | Entry into a Material Definitive Agreement. |
Credit Agreement Governing New Term Loan Facility
On March 22, 2024 (the “Closing Date”), Clear Channel International B.V., a Dutch private company with limited liability (“CCIBV”), an indirect, wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc. (the “Company”) entered into a credit agreement (the “CCIBV Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacities, the “Agent”), and J.P. Morgan SE, as lead arranger and bookrunner. The CCIBV Credit Agreement governs CCIBV’s new term loan facility (as described below) (the “CCIBV Term Loan Facility” and the term loans incurred thereunder, the “Term Loans”).
Size and Availability
The CCIBV Term Loan Facility is comprised of two tranches of Term Loans totaling an aggregate principal amount of $375.0 million: (1) a “fixed rate” tranche of Term Loans in an aggregate principal amount of $300.0 million (the “Fixed Rate Term Loan Tranche”); and (2) a “floating rate” tranche of Term Loans in an aggregate principal amount of $75.0 million (the “Floating Rate Term Loan Tranche”). The Term Loans were used to redeem all of the Existing CCIBV Notes (as described below) and to pay certain related transaction fees and expenses.
Maturity, Interest Rate and Prepayments
The CCIBV Term Loan Facility matures on April 1, 2027 (the “Maturity Date”) and bears interest (1) at a fixed rate of 7.5% per annum, payable semi-annually in arrears on April 1 and October 1 of each year for the Fixed Rate Term Loan Tranche and (2) at a floating rate equal to the benchmark rate “Term SOFR” plus 2.25% per annum (subject to a floor rate of 5.25% per annum), payable at (as elected by the Borrower from time to time) one-, three- or six- month intervals, effective April 1, 2024 for the Floating Rate Term Loan Tranche. The CCIBV Term Loan Facility has no scheduled amortization payments prior to the Maturity Date.
The CCIBV Credit Agreement (1) requires CCIBV to make certain mandatory prepayments, subject to certain requirements and exceptions, and (2) permits CCIBV to make voluntary prepayments at its discretion. The Fixed Rate Term Loan Tranche and the Floating Rate Term Loan Tranche will participate in any voluntary or mandatory repayments or prepayments on a pro rata basis. Prior to the first anniversary of the Closing Date, principal payments in respect of the Term Loans will be subject to a customary make-whole premium based on the yield on U.S. Treasury notes with a maturity closest to the first anniversary of the Closing Date plus 50 basis points. Thereafter, principal payments in respect of the Term Loans will be subject to a premium equal to (x) 2.00% on or after the first anniversary of the Closing Date and prior to the second anniversary of the Closing Date, (y) 1.00% on and after the second anniversary of the Closing Date and prior to the third anniversary of the Closing Date and (z) 0.00% thereafter. Notwithstanding the foregoing, (1) any principal payments in respect of the Term Loans made in connection with a “change of control” (or a sale of all or substantially all assets) or a similar transformative transaction and (2) any prepayment, whether voluntary or mandatory, made in connection with certain asset sales, in each case, may be prepaid at par and shall not be subject to any premium.
Guarantees and Security
The CCIBV Term Loan Facility will be guaranteed by certain of CCIBV’s existing and future subsidiaries (collectively, the “Guarantors”) no later than 120 days from the Closing Date, subject to extension as permitted in accordance with the CCIBV Credit Agreement. The Company will not guarantee or otherwise assume any liability under the CCIBV Term Loan Facility. As of the Closing Date, the contemplated Guarantors are all organized under the laws of a jurisdiction outside of the United States.
The CCIBV Term Loan Facility and certain of the guarantees (the “Secured Guarantees”) will be secured, no later than 120 days from the Closing Date, subject to extension as permitted in accordance with the CCIBV Credit Agreement, by security interests in, and pledges over, certain assets and property (including, without limitation, (i) capital stock, (ii) material bank accounts and (iii) intercompany receivables) of or in CCIBV and the Guarantors (the “Security Interests”), in each case subject to certain agreed security principles, permitted liens and other customary exceptions and qualifications. The CCIBV Term Loan Facility is or will be a senior secured obligation that ranks, in right of payment, pari passu to all unsubordinated indebtedness of CCIBV and senior to all subordinated indebtedness of CCIBV and is or will rank, in right of security, senior to all unsecured and junior lien indebtedness of CCIBV to the extent of the value of the assets that constitute collateral after
