Cumulus Media Announces Extension of Expiration Time in Exchange Offer and Consent Solicitation Relating to 6.750% Senior Secured First-Lien Notes due 2026
Cumulus Media Inc. (CMLS) extends the Expiration Time for its Exchange Offer and Consent Solicitation, offering to exchange 6.750% Senior Secured First-Lien Notes due 2026 for new 8.750% Senior Secured First-Lien Notes due 2029. The New Expiration Time is set for April 2, 2024, with a deadline for withdrawing tenders on March 11, 2024. Holders that tender prior to the New Expiration Time are eligible to receive $770.00 principal amount of New Notes. Approximately $15 million aggregate principal amount of the Old Notes had been tendered as of March 26, 2024.
The extension of the exchange offer and consent solicitation by Cumulus Media's subsidiary represents a strategic financial maneuver aimed at restructuring the company's debt profile. By offering to exchange the 6.750% Senior Secured First-Lien Notes due in 2026 for new 8.750% Senior Secured First-Lien Notes with a later maturity in 2029, the company appears to be seeking to ease short-term liquidity pressures by deferring debt obligations. However, this comes at the cost of increased interest rates, which could indicate that the company is facing higher perceived credit risk or seeking to incentivize participation in the exchange offer.
The relatively low uptake of the exchange offer by the initial expiration time, with only $15 million of the old notes being tendered, suggests that noteholders may be evaluating the terms of the new notes or considering alternative options. Investors should monitor the final amount of notes exchanged as it could provide insights into the market's confidence in the company's financial stability and its ability to service debt. An increased debt service cost over time could impact the company's profitability and cash flows, potentially affecting its stock price and creditworthiness.
From a debt market perspective, the increase in the interest rate from 6.750% to 8.750% for the new notes is a significant jump, reflecting the current market conditions and the issuer's credit standing. Investors in the fixed income market will assess whether the higher yield compensates for the extended maturity and the potential risk of default. The decision to extend the exchange offer deadline may also be interpreted as an attempt to provide additional time for investors to consider the new terms, which could be seen as an indirect acknowledgment of challenging market conditions or tepid initial interest.
It's also noteworthy that the exchange is being offered to a limited audience, specifically 'qualified institutional buyers' and certain non-U.S. persons, which restricts the pool of potential participants. This targeted approach may be due to regulatory considerations and the desire to engage with more sophisticated investors who can better assess the risks involved. The outcome of this exchange offer could signal broader trends in the high-yield debt market, particularly regarding investor appetite for risk in the media sector amidst evolving consumption patterns and competitive dynamics.
Legally, the fact that the New Notes will not be registered under the Securities Act and are subject to restrictions regarding their sale, particularly in the United States, is a critical consideration for potential investors. The reliance on exemptions from registration requirements suggests a private placement approach, which often involves less public disclosure than registered offerings. As such, investors will need to rely heavily on the Offering Memorandum for information, underscoring the importance of its accuracy and completeness.
Furthermore, the exclusion of Canadian residents from the offer could be due to the specific regulatory environment in Canada, which might require additional compliance measures that the issuer has chosen not to undertake. The compliance with securities and blue sky laws, as well as the consent solicitation process, are key factors that could affect the success of the exchange offer and the legal implications for the issuer. The legal framework surrounding such offers is complex and can influence investor confidence, as non-compliance or perceived legal risks could deter participation and potentially result in regulatory scrutiny.
03/27/2024 - 08:01 AM
ATLANTA, March 27, 2024 (GLOBE NEWSWIRE) -- Cumulus Media Inc. (NASDAQ: CMLS) (the “Company” or “Cumulus”) today announced that its subsidiary, Cumulus Media New Holdings Inc. (the “Issuer”), has extended the Expiration Time in its previously-announced Exchange Offer and Consent Solicitation (the “Exchange Offer and Consent Solicitation”), in which the Issuer offered to exchange 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”). Capitalized terms used but not defined in this press release have the respective meanings ascribed to such terms in the Offering Memorandum.
The Issuer is extending the previously announced Expiration Time, which was 5:00 p.m., New York City Time, on March 26, 2024, to 5:00 p.m., New York City Time, on April 2, 2024 (the "New Expiration Time"). The deadline to validly withdraw tenders of the Old Notes was not extended and expired at 5:00 p.m., New York City Time, on March 11, 2024. The Exchange Offer and Consent Solicitation will expire at the New Expiration Time, unless extended or terminated. The New Expiration Time is subject to earlier termination, withdrawal or extension by the Issuer in its sole and absolute discretion. All other terms of the tender offer remain unchanged.
The previously announced Early Tender Time lapsed at 5:00 p.m., New York City Time, on March 18, 2024. As such, holders that validly tender and do not validly withdraw their Old Notes prior to the New Expiration Time are only 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 New Expiration Time, in cash, to holders of Old Notes accepted for exchange pursuant to the Exchange Offer and Consent Solicitation.
As of 5:00 p.m., New York City time, on March 26, 2024, approximately $15 million aggregate principal amount of the Old Notes had been validly tendered pursuant to the Exchange Offer and Consent Solicitation and not withdrawn.
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 and Consent Solicitation. 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.
Questions or requests for assistance related to the Exchange Offer and Consent Solicitation 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 and Consent Solicitation.
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 and Consent Solicitation is being made solely by the Offering Memorandum. The Exchange Offer and Consent Solicitation 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 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 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.
What is Cumulus Media Inc.'s ticker symbol?
The ticker symbol for Cumulus Media Inc. is CMLS.
What is the Exchange Offer and Consent Solicitation by Cumulus Media Inc. about?
Cumulus Media Inc. is offering to exchange its outstanding 6.750% Senior Secured First-Lien Notes due 2026 for new 8.750% Senior Secured First-Lien Notes due 2029.
When is the New Expiration Time set for the Exchange Offer and Consent Solicitation?
The New Expiration Time for Cumulus Media Inc.'s Exchange Offer and Consent Solicitation is April 2, 2024.
What is the deadline for withdrawing tenders of the Old Notes?
The deadline for withdrawing tenders of the Old Notes was March 11, 2024.
How much are holders eligible to receive if they tender prior to the New Expiration Time?
Holders that tender prior to the New Expiration Time are eligible to receive $770.00 principal amount of New Notes.
How much aggregate principal amount of the Old Notes had been tendered as of March 26, 2024?
As of March 26, 2024, approximately $15 million aggregate principal amount of the Old Notes had been tendered.
