iHeartMedia 2011 Annual Report Download - page 86

CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The obligations of any foreign subsidiaries that are borrowers under the revolving credit facility are also guaranteed by certain of their
material wholly-owned restricted subsidiaries, and secured by substantially all assets of all such borrowers and guarantors, subject to
permitted liens and other exceptions.
Certain Covenants and Events of Default
The senior secured credit facilities contain a financial covenant that requires Clear Channel to comply on a quarterly basis with a
maximum consolidated senior secured net debt to consolidated EBITDA ratio (maximum of 9.5:1). This financial covenant becomes
more restrictive over time. Clear Channel’s senior secured debt consists of the senior secured facilities, the receivables based credit
facility, the priority guarantee notes and certain other secured subsidiary debt. Clear Channel was in compliance with this covenant as
of December 31, 2011.
In addition, the senior secured credit facilities include negative covenants that, subject to significant exceptions, limit Clear Channel’s
ability and the ability of its 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 Clear
Channel’s 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.
Receivables Based Credit Facility
As of December 31, 2011, Clear Channel had no borrowings outstanding under Clear Channel’s receivables based credit facility. On
June 8, 2011, Clear Channel made a voluntary paydown of all amounts outstanding under this facility using cash on hand. Clear
Channel’s voluntary paydown did not reduce its commitments under this facility and Clear Channel may reborrow under this facility
at any time.
The receivables based credit facility provides revolving credit of $625.0 million, subject to a borrowing base. The borrowing base at
any time equals 85% of Clear Channel’s and certain of Clear Channel’s 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.
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a lien on the ca
p
ital stock of Clear Channel;
100% of the capital stock of any future material wholly-owned domestic license subsidiary that is not a “Restricted
Subsidiar
y
” under the indenture
g
overnin
g
the Clear Channel senior notes;
certain assets that do not constitute “principal property” (as defined in the indenture governing the Clear Channel senior
notes);
certain specified assets of Clear Channel and the guarantors that constitute “principal property” (as defined in the
indenture governing the Clear Channel senior notes) securing obligations under the senior secured credit facilities up to
the maximum amount permitted to be secured by such assets without requiring equal and ratable security under the
indenture
g
overnin
g
the Clear Channel senior notes; and
a lien on the accounts receivable and related assets securing Clear Channel’s receivables based credit facility that is
j
unior to the lien securin
g
Clear Channel’s obli
g
ations under such credit facilit
y
.
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 Clear Channel’s ca
p
ital stock;
make investments, loans, or advances;
prepay certain junior 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 lines of business.