iHeartMedia 2011 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2011 iHeartMedia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

In addition, the senior secured credit facilities include negative covenants that, subject to significant exceptions, limit our
ability and the ability of our restricted subsidiaries to, among other things:
The senior secured credit facilities include certain customary representations and warranties, affirmative covenants and events of
default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain
indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, the invalidity of material provisions of
the senior secured credit facilities documentation, the failure of collateral under the security documents for the senior secured credit
facilities, the failure of the senior secured credit facilities to be senior debt under the subordination provisions of certain of our
subordinated debt and a change of control. If an event of default occurs, the lenders under the senior secured credit facilities will be
entitled to take various actions, including the acceleration of all amounts due under the senior secured credit facilities and all actions
permitted to be taken by a secured creditor.
R
eceivables Based Credit Facility
As of December 31, 2011, we had no borrowings outstanding under our receivables based credit facility. On June 8, 2011,
we made a voluntary paydown of all amounts outstanding under this facility using cash on hand. The voluntary paydown did not
reduce our commitments under this facility and we may reborrow under this facility at any time.
The receivables based credit facility provides revolving credit commitments of $625.0 million, subject to a borrowing base.
The borrowing base at any time equals 85% of our and certain of our subsidiaries’ eligible accounts receivable. The receivables based
credit facility includes a letter of credit sub-facility and a swingline loan sub-facility. The maturity of the receivables based credit
facility is July 2014.
All borrowings under the receivables based credit facility are subject to the absence of any default, the accuracy of
representations and warranties and compliance with the borrowing base. In addition, borrowings under the receivables based credit
facility, excluding the initial borrowing, 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.
We and certain subsidiary borrowers are the borrowers under the receivables based credit facility. We have the ability to
designate one or more of our restricted subsidiaries as borrowers under the receivables based credit facility. The receivables based
credit facility loans and letters of credit are available in U.S. dollars.
I
nterest Rate and Fees
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 or (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 is (i) 1.40%, in the case of base rate loans and
(ii) 2.40% in the case of Eurocurrency rate loans subject to adjustment if our leverage ratio of total debt to EBITDA decreases below
7 to 1.
47
•
incur additional indebtedness;
•
create liens on assets;
•
en
g
a
g
e in mer
g
ers, consolidations, li
q
uidations and dissolutions;
•
sell assets;
•
p
a
y
dividends and distributions or re
p
urchase our ca
p
ital stock;
•
make investments, loans, or advances;
•
p
re
p
a
y
certain
j
unior indebtedness;
•
en
g
a
g
e in certain transactions with affiliates;
•
amend material a
g
reements
g
overnin
g
certain
j
unior indebtedness; and
•
chan
g
e our lines of business.