iHeartMedia 2014 Annual Report Download - page 58

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create restrictions on the payment of dividends or other amounts to it from its restricted subsidiaries that are not
guarantors of the CCWH Senior Notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;
sell certain assets, including capital stock of its subsidiaries;
designate its subsidiaries as unrestricted subsidiaries; and
pay dividends, redeem or repurchase capital stock or make other restricted payments.
The Series A CCWH Senior Notes indenture and Series B CCWH Senior 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 (i) additional
indebtedness under this test, CCOH’s debt to adjusted EBITDA ratios (as defined by the indentures) must be lower than 7.0:1 and
5.0:1 for total debt and senior debt, respectively, and (ii) additional indebtedness that is subordinated to the CCWH Senior Notes
under this test, CCOH’s debt to adjusted EBITDA ratios (as defined by the indentures) must be lower than 7.0:1 for total debt. The
indentures contain certain other exceptions that allow CCOH to incur additional indebtedness. The Series B CCWH Senior Notes
indenture also permits CCOH to pay dividends from the proceeds of indebtedness or the proceeds from asset sales if its debt to
adjusted EBITDA ratios (as defined by the indentures) are lower than 7.0:1 and 5.0:1 for total debt and senior debt, respectively. The
Series A CCWH Senior Notes indenture does not limit CCOH’s ability to pay dividends. The Series B CCWH Senior Notes indenture
contains certain exceptions that allow CCOH to pay dividends, including (i) $525.0 million of dividends made pursuant to general
restricted payment baskets and (ii) dividends made using proceeds received upon a demand by CCOH of amounts outstanding under
the revolving promissory note issued by us to CCOH.
CCWH Senior Subordinated Notes
As of December 31, 2014, CCWH Subordinated Notes represented $2.2 billion of aggregate principal amount of
indebtedness outstanding, which consist of $275.0 million aggregate principal amount of 7.625% Series A Senior Subordinated Notes
due 2020 (the “Series A CCWH Subordinated Notes”) and $1,925.0 million aggregate principal amount of 7.625% Series B Senior
Subordinated Notes due 2020 (the “Series B CCWH Subordinated Notes”). Interest on the CCWH Subordinated Notes is payable to
the trustee weekly in arrears and to the noteholders on March 15 and September 15 of each year, which began on September 15, 2012.
The CCWH Subordinated Notes are CCWH’s senior subordinated obligations and are fully and unconditionally guaranteed,
jointly and severally, on a senior subordinated basis by CCOH, CCOI and certain of CCOH’s other domestic subsidiaries. The CCWH
Subordinated Notes are unsecured senior subordinated obligations that rank junior to all of CCWH’s existing and future senior debt,
including the CCWH Senior Notes, equally with any of CCWH’s existing and future senior subordinated debt and ahead of all of
CCWH’s existing and future debt that expressly provides that it is subordinated to the CCWH Subordinated Notes. The guarantees of
the CCWH Subordinated Notes rank junior to each guarantor’s existing and future senior debt, including the CCWH Senior Notes,
equally with each guarantor’s existing and future senior subordinated debt and ahead of each guarantor’s existing and future debt that
expressly provides that it is subordinated to the guarantees of the CCWH Subordinated Notes.
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 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 us and our subsidiaries (other than CCOH) or issue certain
preferred stock;