iHeartMedia 2012 Annual Report Download - page 96

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CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
93
At any time prior to March 15, 2015, CCWH may redeem the CCWH Subordinated Notes, in whole or in part, at a price equal to
100% of the principal amount of the CCWH Subordinated Notes plus a “make-whole” premium, together with accrued and unpaid
interest, if any, to the redemption date. CCWH may redeem the CCWH Subordinated Notes, in whole or in part, on or after March 15,
2015, at the redemption prices set forth in the applicable indenture governing the CCWH Subordinated Notes plus accrued and unpaid
interest to the redemption date. At any time on or before March 15, 2015, CCWH may elect to redeem up to 40% of the then
outstanding aggregate principal amount of the CCWH Subordinated Notes at a redemption price equal to 107.625% of the principal
amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of one or more equity offerings, subject
to certain restrictions. Notwithstanding the foregoing, neither CCOH nor any of its subsidiaries is permitted to make any purchase of,
or otherwise effectively cancel or retire any Series A CCWH Subordinated Notes or Series B CCWH Subordinated Notes if, after
giving effect thereto and, if applicable, any concurrent purchase of or other addition with respect to any Series B CCWH Subordinated
Notes or Series A CCWH Subordinated Notes, as applicable, the ratio of (a) the outstanding aggregate principal amount of the
Series A CCWH Subordinated Notes to (b) the outstanding aggregate principal amount of the Series B CCWH Subordinated Notes
shall be greater than 0.25, subject to certain exceptions.
The Company capitalized $40.0 million in fees and expenses associated with the CCWH Subordinated Notes offering and are
amortizing them through interest expense over the life of the CCWH Subordinated Notes.
The indenture governing the Series A CCWH Subordinated Notes contains covenants that limit CCOH and its restricted subsidiaries
ability to, among other things:
incur or guarantee additional debt to persons other than Clear Channel and its subsidiaries (other than CCOH) or issue
certain preferred stock;
create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not
guarantors of the notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of CCOH’s assets; and
sell certain assets, including capital stock of CCOH’s subsidiaries, to persons other than Clear Channel and its
subsidiaries (other than CCOH).
In addition, the indenture governing the Series A CCWH Subordinated Notes provides that if CCWH (i) makes an optional
redemption of the Series B CCWH Subordinated Notes or purchases or makes an offer to purchase the Series B CCWH Subordinated
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 CCWH Subordinated Notes or (ii) makes an asset sale offer under the indenture governing
the Series B CCWH Subordinated Notes, then CCWH shall apply a pro rata amount to make an offer to purchase a pro rata amount of
Series A CCWH Subordinated Notes.
The indenture governing the Series A CCWH Subordinated Notes does not include limitations on dividends, distributions, investments
or asset sales.
The indenture governing the Series B CCWH Subordinated Notes contains covenants that limit CCOH and its restricted subsidiaries
ability to, among other things:
incur or guarantee additional debt or issue certain preferred stock;
make certain investments;
create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not
guarantors of the notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of CCOH’s assets;
sell certain assets, including capital stock of CCOH’s subsidiaries;
designate CCOH’s subsidiaries as unrestricted subsidiaries; and
pay dividends, redeem or repurchase capital stock or make other restricted payments.
The Series A CCWH Subordinated Notes indenture and Series B CCWH Subordinated Notes indenture restrict CCOH’s ability to
incur additional indebtedness but permit CCOH to incur additional indebtedness based on an incurrence test. In order to incur
additional indebtedness under this test, CCOH’s debt to adjusted EBITDA ratios (as defined by the indentures) must be lower than