iHeartMedia 2009 Annual Report Download - page 65

Borrowings, excluding the initial borrowing, under the receivables based credit facility are subject to compliance with a
minimum fixed charge coverage ratio of 1.0:1.0 if at any time excess availability under the receivables based credit facility is less
than $50 million, or if aggregate excess availability under the receivables based credit facility and revolving credit facility is less than
10% of the borrowing base.
Borrowings under the receivables based credit facility bear interest at a rate equal to an applicable margin plus, at our
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 percentage applicable to the receivables based credit facility which is (i) 1.40%, in the case of base rate loans
and (ii) 2.40% in the case of Eurocurrency rate loans subject to downward adjustments if our leverage ratio of total debt to EBITDA
decreases below 7 to 1.
We are required to pay each lender a commitment fee in respect of any unused commitments under the receivables based
credit facility, which is 0.375% per annum, subject to downward adjustments if our leverage ratio of total debt to EBITDA decreases
below 6 to 1.
If at any time the sum of the outstanding amounts under the receivables based credit facility (including the letter of credit
outstanding amounts and swingline loans thereunder) exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitments
under the receivables based credit facility, we will be required to repay outstanding loans and cash collateralize letters of credit in an
aggregate amount equal to such excess.
We may voluntarily repay outstanding loans under the receivables based credit facility at any time without premium or
penalty, other than customary “breakage” costs with respect to Eurocurrency rate loans.
The receivables based credit facility is guaranteed by, subject to certain exceptions, the guarantors of the senior secured
credit facilities. All obligations under the receivables based credit facility, and the guarantees of those obligations, are secured by a
perfected first priority security interest in all of our and all of the guarantors’ accounts receivable and related assets and proceeds
thereof, subject to permitted liens and certain exceptions.
The receivables based credit facility includes negative covenants, representations, warranties, events of default, conditions
precedent and termination provisions substantially similar to those governing our senior secured credit facilities.
Senior Cash Pay Notes and Senior Toggle Notes
We have outstanding $796.3 million aggregate principal amount of 10.75% senior cash pay notes due 2016 and $915.2
million aggregate principal amount of 11.00%/11.75% senior toggle notes due 2016.
The senior toggle notes mature on August 1, 2016 and may require a special redemption of up to $30.0 million on
August 1, 2015. We may elect on each interest election date to pay all or 50% of such interest on the senior toggle notes in cash or by
increasing the principal amount of the senior toggle notes or by issuing new senior toggle notes (such increase or issuance, “PIK
Interest”). Interest on the senior toggle notes payable in cash will accrue at a rate of 11.00% per annum and PIK Interest will accrue at
a rate of 11.75% per annum.
On January 15, 2009, we made a permitted election under the indenture governing the senior toggle notes to pay PIK
Interest under the senior toggle notes for the semi-annual interest period commencing February 1, 2009. For subsequent interest
periods, we must make an election regarding whether the applicable interest payment on the senior toggle notes will be made entirely
in cash, entirely through PIK Interest or 50% in cash and 50% in PIK Interest. In the absence of such an election for any interest
period, interest on the senior toggle notes will be payable according to the election for the immediately preceding interest period. As a
result, we are deemed to have made the PIK Interest election for future interest periods unless and until we elect otherwise.
A contractual payment to bondholders will be required on August 1, 2013. The amount included in “Interest payments on
long-term debt” in the Contractual Obligations table of this MD&A assumes that we continue to make the PIK election.
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