iHeartMedia has started discussions with some of its lenders. Different groups of creditors are trying to get their share of the money that iHeartMedia owes them. This has led to what's being called “lender on lender violence” / "creditor on creditor violence" in the financial industry.
Pacific Investment Management Co. (PIMCO) engaged in exclusive discussions with iHeartMedia regarding its debt situation. These talks are causing concern among other creditors who are not part of the negotiations. As a significant lender and shareholder, PIMCO recently exited a consortium of lenders that held the majority of iHeartMedia's loans and potentially its unsecured bonds.
iHeartMedia owes $5.2 billion. They need to pay back a $1.8 billion loan and an $800 million note with 6.375% interest, both by 2026.
The company is under pressure because its ad revenue is going down. iHeartMedia's stock price has dropped a lot, falling 28% in one week and 64% over the past year.
iHeartMedia lost a lot of money, about $1.1 billion, last year. But experts think the company might start making a profit by 2024.
Institutions own most of iHeartMedia's shares, about 75%. The top 7 shareholders together own half of the company.
Some creditor groups have hired experts to help them. Evercore is helping with financial advice, and the law firm Milbank is giving legal advice. Negotiations with creditors are ongoing, though specific details are not public
Our Opinion
This situation is creating a tough negotiation where different groups are trying to get the best deal for their investments. Everyone is watching iHeartMedia and its creditors to see who wins in this financial struggle. This case shows how complicated and difficult debt restructuring can be for big companies with many creditors, each wanting to get as much money back as possible in a tough financial situation.
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