iHeartMedia 2009 Annual Report Download - page 116

The Company and its subsidiaries have from time to time repurchased certain debt obligations of Clear Channel and may in the
future, as part of various financing and investment strategies it may elect to pursue, purchase additional outstanding indebtedness of
Clear Channel or its subsidiaries or outstanding equity securities of Clear Channel Outdoor Holdings, Inc., in tender offers, open
market purchases, privately negotiated transactions or otherwise. The Company may also sell certain assets or properties and use the
proceeds to reduce its indebtedness or the indebtedness of its subsidiaries. These purchases or sales, if any, could have a material
positive or negative impact on the Company’s liquidity available to repay outstanding debt obligations or on the Company’s
consolidated results of operations. These transactions could also require or result in amendments to the agreements governing
outstanding debt obligations or changes in the Company’s leverage or other financial ratios, which could have a material positive or
negative impact on the Company’s ability to comply with the covenants contained in its debt agreements. These transactions, if any,
will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. The
amounts involved may be material.
Senior Secured Credit Facilities
Borrowings under the senior secured credit facilities bear interest at a rate equal to an applicable margin plus, at Clear Channel’s
option, either (i) a base rate determined by reference to the higher of (A) the prime lending rate publicly announced by the
administrative agent and (B) the Federal funds effective rate from time to time plus 0.50%, or (ii) a Eurocurrency rate determined by
reference to the costs of funds for deposits for the interest period relevant to such borrowing adjusted for certain additional costs.
The margin percentages applicable to the term loan facilities and revolving credit facility are the following percentages per annum:
Clear Channel is required to pay each revolving credit lender a commitment fee in respect of any unused commitments under the
revolving credit facility, which is 0.50% per annum, subject to downward adjustments if Clear Channel’s leverage ratio of total debt
to EBITDA decreases below 4 to 1. Clear Channel is required to pay each delayed draw term facility lender a commitment fee in
respect of any undrawn commitments under the delayed draw term facilities, which initially is 1.825% per annum until the delayed
draw term facilities are fully drawn or commitments thereunder terminated.
The senior secured credit facilities include two delayed draw term loan facilities. The first is a $589.8 million facility which may be
drawn to purchase or redeem Clear Channel’s outstanding 7.65% senior notes due 2010, of which $451.0 million was drawn as of
December 31, 2009, and a $423.4 million facility which was drawn to redeem Clear Channel’s outstanding 4.25% senior notes in
May 2009.
The senior secured credit facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with:
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• with respect to loans under the term loan A facility and the revolving credit facility, (i) 2.40% in the case of base rate loans
and (ii) 3.40% in the case of Eurocurrency rate loans, subject to downward adjustments if Clear Channel’s leverage ratio of
total debt to EBITDA (as calculated in accordance with the senior secured credit facilities) decreases below 7 to 1; and
• with respect to loans under the term loan B facility, term loan C - asset sale facility and delayed draw term loan facilities,
(i) 2.65% in the case of base rate loans and (ii) 3.65% in the case of Eurocurrency rate loans subject to downward
adjustments if the Company’s leverage ratio of total debt to EBITDA decreases below 7 to 1.
• 50% (which percentage will be reduced to 25% and to 0% based upon the Company’s leverage ratio) of the
Company’s annual excess cash flow (as calculated in accordance with the senior secured credit facilities), less any
voluntary prepayments of term loans and revolving credit loans (to the extent accompanied by a permanent
reduction of the commitment) and subject to customary credits;
• 100% (which percentage will be reduced to 75% and 50% based upon the Company’s leverage ratio) of the net cash
proceeds of sales or other dispositions by the Company or its wholly-owned restricted subsidiaries (including
casualty and condemnation events) of assets other than specified assets subject to reinvestment rights and certain
other exceptions; and