iHeartMedia 2004 Annual Report Download - page 79

credit facility. On December 16, 2004, the Company paid the outstanding balance in its entirety and terminated its reducing revolving credit
facility, which was originally in the amount of $2.0 billion.
At December 31, 2004, the outstanding balance on the $1.75 billion credit facility was $350.5 million and, taking into account letters of credit
of $162.6 million, $1.2 billion was available for future borrowings, with the entire balance to be repaid on July 12, 2009. At December 31,
2004, interest rates on this bank credit facility were 2.86% on borrowings denominated in US dollars and varied from 1.9% to 5.76% on
borrowings in other currencies.
Senior Notes
On February 25, 2004, the Company redeemed 454.4 million of its 6.5% senior notes due July 7, 2005, for 477.7 million plus accrued
interest. As a result of this redemption the Company recorded a pre-tax loss of $31.6 million on the early extinguishment of debt. After this
redemption, 195.6 million of the 6.5% senior notes remain outstanding.
On September 15, 2004, the Company completed a debt offering of $750.0 million 5.5% notes due September 15, 2014. Interest is payable on
March 15 and September 15. The aggregate net proceeds of approximately $743.1 million were used to repay borrowings outstanding under
the Company’s bank credit facilities and for general corporate purposes.
On November 17, 2004, the Company completed a debt offering of $250.0 million 4.5% notes due January 15, 2010. Interest is payable on
January 15 and July 15. The aggregate net proceeds of approximately $248.4 million were used to repay borrowings outstanding under the
Company’s bank credit facilities.
On December 13, 2004, the Company completed a debt offering of $250.0 million 5.5% notes due December 15, 2016. Interest is payable on
June 15 and December 15. The aggregate net proceeds of approximately $247.1 million were used to repay borrowings outstanding under the
Company’s bank credit facilities.
All fees and initial offering discounts are being amortized as interest expense over the life of the respective notes. The aggregate face value and
market value of the senior notes was approximately $6.8 billion and $7.1 billion, respectively, at December 31, 2004. The aggregate face value
and market value of the senior notes was approximately $6.1 billion and $6.6 billion, respectively, at December 31, 2003.
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nterest Rate Swaps: The Company entered into interest rate swap agreements on the 3.125% senior notes due 2007, the 4.25% senior notes
due 2009, the 4.4% senior notes due 2011 and the 5.0% senior notes due 2012 whereby the Company pays interest at a floating rate and
receives the fixed rate coupon. The Company terminated an interest rate swap agreement on the 7.875% notes due 2005 during 2003 and
received $83.8 million in proceeds. The fair value of our swaps was $6.5 million and $7.0 million at December 31, 2004 and 2003,
respectively.
Various Subsidiary Level Notes
The aggregate face value and market value of the various subsidiary level notes was approximately $688.8 million and $688.1 million at
December 31, 2004 and 2003, respectively.
The aggregate remaining balance of AMFM Operating Inc.’s long-term bonds, of which are all 8% senior notes due 2008, was $685.1 million
at December 31, 2004, which includes a purchase accounting premium of $13.8 million.
Debt Covenants
The Company’s significant covenants on its $1.75 billion five-year, multi-currency revolving credit facility relate to leverage and interest
coverage contained and defined in the credit facility. The leverage ratio covenant requires the Company to maintain a ratio of consolidated
funded indebtedness to operating cash flow (as defined by the credit facility) of less than 5.25x. The interest coverage covenant requires the
Company to maintain a minimum ratio of operating cash flow (as defined by the credit facility) to interest expense of 2.50x. In the event that
the Company does not meet these covenants, it is considered to be in default on the credit facility at which time the credit facility may become
immediately due. At December 31 2004, the Company’s leverage and interest coverage ratios were 3.1x and 6.4x, respectively. This credit
facility contains a cross default provision that would be triggered if the
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