iHeartMedia 2014 Annual Report Download - page 59

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create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not
guarantors of the notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of CCOH’s assets; and
sell certain assets, including capital stock of CCOH’s subsidiaries, to persons other than us and our subsidiaries (other
than CCOH).
In addition, the indenture governing the Series A CCWH Subordinated Notes provides that if CCWH (i) makes an optional
redemption of the Series B CCWH Subordinated Notes or purchases or makes an offer to purchase the Series B CCWH Subordinated
Notes at or above 100% of the principal amount thereof, then CCWH shall apply a pro rata amount to make an optional redemption or
purchase a pro rata amount of the Series A CCWH Subordinated Notes or (ii) makes an asset sale offer under the indenture governing
the Series B CCWH Subordinated Notes, then CCWH shall apply a pro rata amount to make an offer to purchase a pro rata amount of
Series A CCWH Subordinated Notes.
The indenture governing the Series A CCWH Subordinated Notes does not include limitations on dividends, distributions,
investments or asset sales.
The indenture governing the Series B CCWH Subordinated Notes contains covenants that limit CCOH and its restricted
subsidiaries ability to, among other things:
incur or guarantee additional debt or issue certain preferred stock;
make certain investments;
create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not
guarantors of the notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of CCOH’s assets;
sell certain assets, including capital stock of CCOH’s subsidiaries;
designate CCOH’s subsidiaries as unrestricted subsidiaries; and
pay dividends, redeem or repurchase capital stock or make other restricted payments.
The Series A CCWH Subordinated Notes indenture and Series B CCWH Subordinated Notes indenture restrict CCOH’s
ability to incur additional indebtedness but permit CCOH to incur additional indebtedness based on an incurrence test. In order to
incur additional indebtedness under this test, CCOH’s debt to adjusted EBITDA ratios (as defined by the indentures) must be lower
than 7.0:1. The indentures contain certain other exceptions that allow CCOH to incur additional indebtedness. The Series B CCWH
Subordinated Notes indenture also permits CCOH to pay dividends from the proceeds of indebtedness or the proceeds from asset sales
if its debt to adjusted EBITDA ratios (as defined by the indentures) is lower than 7.0:1. The Series A CCWH Senior Subordinated
Notes indenture does not limit CCOH’s ability to pay dividends. The Series B CCWH Subordinated Notes indenture contains certain
exceptions that allow CCOH to pay dividends, including (i) $525.0 million of dividends made pursuant to general restricted payment
baskets and (ii) dividends made using proceeds received upon a demand by CCOH of amounts outstanding under the revolving
promissory note issued by us to CCOH.
Refinancing Transactions
2014 Refinancing Transactions
On February 14, 2014, CC Finco, an indirect wholly-owned subsidiary of ours, sold $227.0 million in aggregate principal
amount of 14.0% Senior Notes due 2021 issued by us to private purchasers in a transaction exempt from registration under the
Securities Act of 1933, as amended. This $227.0 million in aggregate principal amount of 14.0% Senior Notes due 2021, which was
previously eliminated in consolidation because the notes were held by a subsidiary, is now reflected on our consolidated balance sheet.
CC Finco contributed the net proceeds from the sale of the 14.0% Senior Notes due 2021 to us.
On May 1, 2014, CCU Escrow Corporation issued $850.0 million in aggregate principal amount of 10.0% Senior Notes due
2018 in a private offer. On June 6, 2014, CCU Escrow Corporation merged into us, and we assumed CCU Escrow Corporation’s
obligations under the Senior Notes due 2018. Using the proceeds from the issuance of the 10.0% Senior Notes due 2018, we
redeemed $567.1 million aggregate principal amount of our 5.5% Senior Notes due 2014 (including $158.5 million principal amount
of the notes held by a subsidiary of ours) and $241.0 million aggregate principal amount of our 4.9% Senior Notes due 2015.
On August 22, 2014, we issued and sold $222.2 million in aggregate principal amount of new 14.0% Senior Notes due 2021
to CC Finco in a transaction exempt from registration under the Securities Act of 1933, as amended. The new 14.0% Senior Notes due