iHeartMedia 2011 Annual Report Download - page 53

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The subsidiary senior notes are senior obligations that rank pari passu in right of payment to all unsubordinated
indebtedness of CCWH and the guarantees of the subsidiary senior notes rank pari passu in right of payment to all unsubordinated
indebtedness of the guarantors.
The indentures governing the subsidiary senior notes require CCWH to maintain at least $100 million in cash or other
liquid assets or have cash available to be borrowed under committed credit facilities consisting of (i) $50.0 million at the issuer and
guarantor entities (principally the Americas outdoor segment) and (ii) $50.0 million at the non-guarantor subsidiaries (principally the
International outdoor segment) (together the “Liquidity Amount”), in each case under the sole control of the relevant entity. In the
event of a bankruptcy, liquidation, dissolution, reorganization, or similar proceeding of ours, for the period thereafter that is the
shorter of such proceeding and 60 days, the Liquidity Amount shall be reduced to $50.0 million, with a $25.0 million requirement at
the issuer and guarantor entities and a $25.0 million requirement at the non-guarantor subsidiaries.
In addition, interest on the subsidiary senior notes accrues daily and is payable into an account established by the trustee
for the benefit of the bondholders (the “Trustee Account”). Failure to make daily payment on any day does not constitute an event of
default so long as (a) no payment or other transfer by CCOH or any of its subsidiaries shall have been made on such day under the
cash management sweep with Clear Channel and (b) on each semiannual interest payment date the aggregate amount of funds in the
Trustee Account is equal to at least the aggregate amount of accrued and unpaid interest on the subsidiary senior notes.
The indenture governing the Series A Notes contains covenants that limit CCOH and its restricted subsidiaries ability to,
among other things:
In addition, the indenture governing the Series A Notes provides that if CCWH (i) makes an optional redemption of the
Series B Notes or purchases or makes an offer to purchase the Series B 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 Notes or
(ii) makes an asset sale offer under the indenture governing the Series B Notes, then CCWH shall apply a pro rata amount to make an
offer to purchase a pro rata amount of Series A Notes.
The indenture governing the Series A Notes does not include limitations on dividends, distributions, investments or asset
sales.
The indenture governing the Series B Notes contains covenants that limit CCOH and its restricted subsidiaries ability to,
among other things:
50
•
incur or guarantee additional debt to persons other than us and our subsidiaries (other than CCOH) or issue certain
p
referred stock;
•
create liens on its restricted subsidiaries assets to secure such debt;
•
create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not
g
uarantors of the notes;
•
enter into certain transactions with affiliates;
•
mer
g
e or consolidate with another
p
erson, or sell or otherwise dis
p
ose of all or substantiall
y
all of its assets;
•
sell certain assets, including capital stock of its subsidiaries, to persons other than us and our subsidiaries (other than
CCOH); and
•
purchase or otherwise effectively cancel or retire any of the Series A Notes if after doing so the ratio of (a) the outstanding
aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes
shall be
g
reater than 0.250.
•
incur or
g
uarantee additional debt or issue certain
p
referred stock;
•
redeem, re
p
urchase or retire CCOH’s subordinated debt;
•
make certain investments;
•
create liens on its or its restricted subsidiaries’ assets to secure debt;
•
create restrictions on the payment of dividends or other amounts to it from its restricted subsidiaries that are not guarantors
of the subsidiar
y
senior notes;
•
enter into certain transactions with affiliates;
•
mer
g
e or consolidate with another
p
erson, or sell or otherwise dis
p
ose of all or substantiall
y
all of its assets;
•
sell certain assets, includin
g
ca
p
ital stock of its subsidiaries;
•
desi
g
nate its subsidiaries as unrestricted subsidiaries;
•
p
a
y
dividends, redeem or re
p
urchase ca
p
ital stock or make other restricted
p
a
y
ments; and