Cumulus Media Inc. (NASDAQ: CMLS) (the “Company” or “Cumulus”)
today announced that its subsidiary, Cumulus Media New Holdings
Inc. (the “Issuer”), has commenced an offer to exchange (the
“Exchange Offer”) any and all of the Issuer’s outstanding 6.750%
Senior Secured First-Lien Notes due 2026 (the “Old Notes”) for new
8.750% Senior Secured First-Lien Notes due 2029 (“New Notes”) to be
issued by the Issuer, upon the terms of and subject to the
conditions set forth in the confidential offering memorandum and
consent solicitation statement dated February 27, 2024 (the
“Offering Memorandum”). All capitalized terms not defined herein
are defined in the Offering Memorandum, unless otherwise noted.
The table below summarizes the principal economic terms of the
Exchange Offer:
|
|
|
|
Consideration per $1,000 Principal Amount of Old
NotesTendered |
Old NotesCUSIP Number or
ISIN |
|
Principal Amount of OldNotes Outstanding |
|
Total Consideration ifTendered Prior to the
EarlyDeadline(1) |
|
Late Consideration ifTendered After the
EarlyDeadline |
23110AAA4 U1269CAA2 US23110AAA43USU1269CAA28 |
|
$346,245,000 |
|
$800.00 principal amount ofNew Notes |
|
$770.00 principal amount ofNew Notes |
__________________(1) Includes the Early Tender
Premium (as defined below).
The New Notes will mature on March 15, 2029 and will be fully
and unconditionally guaranteed on a senior secured basis on the
same basis and by the same guarantors that guarantee the Old Term
Loans (as defined below) and the Old Notes. The New Notes and
related guarantees will be secured by substantially all of the
Issuer’s and the guarantors’ assets, including (i) a first-priority
lien on the Term Loan Priority Collateral and (ii) a
second-priority lien on the ABL Priority Collateral, subject to
permitted liens and certain exceptions described in the Offering
Memorandum, which assets will also secure the New Term Loans (as
defined below) and the Company’s existing revolving credit
facility, and will not secure the Old Notes (assuming the Total
Collateral Release Requisite Consents (as defined below) are
obtained). The ABL Priority Collateral includes substantially all
of the Issuer’s and the guarantors’ present and future assets which
secure their obligations under the ABL Credit Agreement on a first
lien basis, including accounts receivable, bank accounts (and funds
on deposit therein) and other related assets and all proceeds
thereof, subject to permitted liens and certain exceptions. The
Term Loan Priority Collateral includes substantially all of the
tangible and intangible assets of the Issuer and the guarantors
(other than the ABL Priority Collateral), including pledges of all
capital stock of the Issuer and the Issuer’s wholly-owned material
restricted subsidiaries or of any of the guarantors.
In addition, the New Notes will be either:
(i) guaranteed by
the Additional Specified Subsidiary Guarantees and secured by the
Additional Specified Subsidiary Collateral, in accordance with the
lien priority set forth in the immediately preceding sentence in
the event (x) the Proposed Amendments (as defined below) are
adopted and (y) the Term Loan Exchange Offer (as defined below) is
consummated (in which case the New Term Loans and the ABL Revolver
will also have the benefit of the Additional Specified Subsidiary
Guarantees and the Additional Specified Subsidiary Collateral);
or
(ii) secured by a
first-priority pledge of equity of the Operating Specified
Subsidiaries in favor of the New Notes (the “Operating Specified
Subsidiary Equity Pledge”) in the event (x) the Proposed Amendments
are not adopted or (y) the Term Loan Exchange Offer is not
consummated.
In either case, the Old Notes and the Old Term Loans will not
have the benefit of the Additional Specified Subsidiary Guarantees,
the Additional Specified Subsidiary Collateral and/or the Operating
Specified Subsidiary Equity Pledge, as applicable.
Holders that validly tender and do not validly withdraw their
Old Notes at or prior to 5:00 p.m., New York City time, on March
11, 2024 (the “Early Tender Time”) will be eligible to receive
$800.00 principal amount of New Notes per $1,000 principal amount
of Old Notes tendered (the “Total Consideration”), which includes
an early tender premium of $30.00 in principal amount of New Notes
per $1,000 principal amount of Old Notes tendered (the “Early
Tender Premium”). Holders that validly tender and do not validly
withdraw their Old Notes after the Early Tender Time and at or
prior to the Expiration Time will not be eligible to receive the
Early Tender Premium and will only be eligible to receive $770.00
principal amount of New Notes. The Issuer will pay accrued and
unpaid interest to, but excluding, the Settlement Date, which is as
soon as practicable after the Expiration Time, in cash, to holders
of Old Notes accepted for exchange pursuant to the Exchange
Offer.
In conjunction with the Exchange Offer, the Issuer is also
soliciting consents (the “Consent Solicitation”) to amend certain
provisions in the Old Notes Indenture (the “Proposed Amendments”).
If consents from holders representing at least 50.1% of the Old
Notes (the “Majority Noteholder Consents”) are received, the
Proposed Amendments would eliminate substantially all restrictive
covenants, eliminate certain events of default, modify or eliminate
certain other provisions, subordinate the lien on the collateral
securing the Old Notes (in the event the Total Collateral Release
does not occur), and permit release of certain guarantors from
their guarantees of the Old Notes and such guarantors’ assets from
the lien securing the Old Notes. If consents from holders
representing at least 66.67% of the Old Notes (the “Total
Collateral Release Requisite Consents”) are received, all the
collateral securing the Old Notes will be released. Holders may not
tender their Old Notes pursuant to the Exchange Offer without
delivering a consent with respect to such Old Notes tendered
pursuant to the Consent Solicitation, and holders may not deliver a
consent pursuant to the Consent Solicitation without tendering the
related Old Notes pursuant to the Exchange Offer.
The consummation of the Exchange Offer is not subject
to, or conditioned upon, any minimum amount of Old Notes being
tendered pursuant to the Exchange Offer, the receipt of the
Majority Noteholder Consents, the consummation of the Term Loan
Exchange Offer or the receipt of any consents to the proposed
amendments to the Old Term Loan Credit Agreement. The consummation
of the Term Loan Exchange Offer is not conditioned on the
consummation of the Exchange Offer. The Issuer reserves
the right in its sole and absolute discretion, to consummate the
Exchange Offer in the event the Issuer does not receive Majority
Noteholder Consents. The Exchange Offer and the Consent
Solicitation may be amended, extended, terminated or withdrawn by
the Issuer, in its sole and absolute discretion, at any time and
for any reason. However, the Exchange Offer may not be
amended, modified or waived in a manner that would remove or
materially impair the value of the Additional Specified Subsidiary
Guarantees, the Additional Specified Subsidiary Collateral or the
Operating Specified Subsidiary Equity Pledge without extending the
Withdrawal Deadline.
The Offer begins today, February 27, 2024, and will expire at
5:00 p.m., New York City time, on March 26, 2024 (the “Expiration
Time”), unless such time is extended as required by law or
otherwise by the Issuer in its sole discretion or earlier
terminated.
Concurrently with the Exchange Offer, the Issuer is also
offering lenders under its senior secured term loans (the “Old Term
Loans”) borrowed under its credit agreement dated as of September
26, 2019 (the “Old Term Loan Credit Agreement”), to exchange their
Old Term Loans for new senior secured term loans (the “New Term
Loans”) issued under a new credit agreement (such exchange, the
“Term Loan Exchange Offer”), and in connection therewith deliver
consents for certain proposed amendments to the Old Term Loan
Credit Agreement. The consummation of the Term Loan
exchange is conditioned on participation from at least 50% in
principal amount of the Old Term Loans, but is not conditioned on
the consummation of the Exchange Offer.
Only holders who have duly completed and submitted an
eligibility letter (which may be found at www.dfking.com/cumulus)
will be authorized to receive the Offering Memorandum and related
letter of transmittal (the “Exchange Offer Documents”) and
participate in the Exchange Offer. The eligibility letters will
include certifications that the holder is either (1) a “qualified
institutional buyer” as defined in Rule 144A under the Securities
Act of 1933 (the “Securities Act”) or (2) a non-“U.S. person” (as
defined in Rule 902 under the Securities Act) located outside of
the United States who is (i) not acting for the account or benefit
of a U.S. person, (ii) a “non-U.S. qualified offeree” (as defined
in the Exchange Offer Documents), and (iii) not a resident in
Canada.
D.F. King & Co., Inc. will act as the Information Agent and
the Exchange Agent for the Exchange Offer. Questions or requests
for assistance related to the Exchange Offers or for additional
copies of the Exchange Offer Documents may be directed to D.F. King
& Co., Inc. at (800) 431-9643 (toll free) or (212) 269-5550
(collect) or cumulus@dfking.com (email). You may also contact your
broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Exchange Offer.
The New Notes have not been and will not be registered under the
Securities Act or the securities laws of any state, and may not be
offered or sold in the United States absent registration or an
exemption from the registration requirements of the Securities Act
and applicable state securities laws.
This announcement is not an offer to purchase or sell, a
solicitation of an offer to purchase or sell or a solicitation of
consents with respect to any securities. The Exchange Offer is
being made solely by the Offering Memorandum. The Exchange Offer is
not being made to holders of Old Notes in any jurisdiction in which
the making or acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction.
Forward-looking statements
Certain statements in this release may constitute
“forward-looking” statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other federal
securities laws. Such statements are statements other than
historical fact and relate to our intent, belief or current
expectations primarily with respect to our future operating,
financial, and strategic performance and our plans and objectives,
including with regard to returning capital to shareholders. Any
such forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and other factors that
may cause actual results, performance or achievements to differ
from those contained in or implied by the forward-looking
statements as a result of various factors. Such factors include,
among others, risks and uncertainties related to the Issuer’s
ability to consummate the Exchange Offer and the Consent
Solicitation and/or the Term Loan Exchange Offer, the Company’s
ability to generate sufficient cash flows to service debt and other
obligations and ability to access capital, including debt or
equity, and the Company’s ability to achieve the benefits
contemplated by the Exchange Offer and the Consent Solicitation
and/or the Term Loan Exchange Offer. We are subject to additional
risks and uncertainties described in our quarterly and annual
reports filed with the Securities and Exchange Commission from time
to time, including in the “Risk Factors,” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections contained therein. You should not rely on
forward-looking statements since they involve known and unknown
risks, uncertainties and other factors that are, in some cases,
beyond the Company’s control, and the unexpected occurrence or
failure to occur of any such events or matters could cause our
actual results, performance, financial condition or achievements to
differ materially from those expressed or implied by such
forward-looking statements. Cumulus assumes no responsibility to
update any forward-looking statements, which are based upon
expectations as of the date hereof, as a result of new information,
future events or otherwise.
For further information, please
contact:Cumulus Media Inc.Investor
Relations DepartmentIR@cumulus.com 404-260-6600
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