Long-Term Debt

6 Months Ended

Jun. 30, 2011

6. Long-Term Debt

The Company’s long-term debt consisted of the following as of June 30, 2011 and December 31, 2010 (dollars in thousands):


	June 30, 2011		December 31, 2010
Senior notes due 2019	$	610,000	$	—
Term loan		—		593,754
Less: Debt discount		—		(2,746	)
Less: Current portion of long-term debt		—		(15,165	)

Long-term debt, net of debt discount	$	610,000	$	575,843

2011 Refinancing

As a part of its refinancing transactions in connection with its pending acquisitions of CMP and Citadel, on May 13, 2011, the Company completed its offering of the Notes. Proceeds from the sale of the Notes were used, among other things, to repay the $575.8 million outstanding under the term loan facility under the credit agreement governing the Company’s senior secured credit facilities (the “2006 Credit Agreement”).

Interest on the Notes is payable on each May 1 and November 1, commencing November 1, 2011. The Notes mature on May 1, 2019.

The Company may redeem all or part of the Notes at any time on or after May 1, 2015. At any time prior to May 1, 2014, the Company may also redeem up to 35.0% of the Notes using the proceeds from certain equity offerings. At any time prior to May 1, 2015, the Company may redeem some or all of the Notes at a price equal to 100% of the principal amount, plus a “make-whole” premium. Further, if the Citadel Merger Agreement is terminated without consummation of the Citadel Acquisition and neither CMP nor any of its subsidiaries has become a restricted subsidiary under the indenture governing the Notes, during each 12-month period commencing on the date of such termination to the third anniversary of such termination date or such earlier time as CMP or any of its subsidiaries becomes a restricted subsidiary under such indenture, the Company may redeem up to 10.0% of the original aggregate principal amount of the Notes at a redemption price of 103.0%. If the Company sells certain assets or experiences specific kinds of changes in control, the Company will be required to make an offer to purchase the Notes.

Each of the Company’s existing and future domestic restricted subsidiaries that guarantees the Company’s indebtedness or indebtedness of the Company’s subsidiary guarantors (other than the Company’s subsidiaries that hold the licenses for the Company’s radio stations) guarantees, and will guarantee, the Notes. Under certain circumstances, the Notes may be assumed by a direct wholly-owned subsidiary of the Company’s, in which case the Company will guarantee the Notes. The Notes are the Company’s senior unsecured obligations and rank equally in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of the Company’s future subordinated debt. The Notes guarantees are the Company’s guarantors’ senior unsecured obligations and rank equally in right of payment to all of the Company’s guarantors’ existing and future senior debt and senior in right of payment to all of the Company’s guarantors’ future subordinated debt. The Notes and the guarantees are effectively subordinated to any of the Company’s or the guarantors’ existing and future secured debt to the extent of the value of the assets securing such debt. In addition, the Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities, including preferred stock, of the Company’s non-guarantor subsidiaries, including all of the liabilities of the Company’s and the guarantors’ foreign subsidiaries and the Company’s subsidiaries that hold the licenses for the Company’s radio stations.

In connection with the 2011 refinancing transactions the Company capitalized $17.5 million in costs during the three months ended June 30, 2011.

2006 Credit Agreement

In connection with the completion of the offering of Notes, effective May 13, 2011 the Company entered into the Fifth Amendment to the 2006 Credit Agreement. The Fifth Amendment provided the Company the ability to complete the offering of Notes, provided that proceeds therefrom were used to repay in full the term loans outstanding under the 2006 Credit Agreement. In addition, the Fifth Amendment, among other things, (i) provides for an incremental term loan facility of up to $200.0 million, which may only be accessed to repurchase Notes under certain circumstances, (ii) replaced the total leverage ratio in the 2006 Credit Agreement with a secured leverage ratio, and (iii) amended certain definitions in the 2006 Credit Agreement to facilitate the Company’s ability to complete the offering of Notes.

The 2006 Credit Agreement currently provides for a revolving credit facility of $20.0 million, of which no amounts were outstanding as of June 30, 2011.

The Company’s obligations under the 2006 Credit Agreement are collateralized by substantially all of its assets in which a security interest may lawfully be granted (including FCC licenses held by its subsidiaries), including, without limitation, intellectual property and all of the capital stock of the Company’s direct and indirect subsidiaries. At June 30, 2011, the Company’s obligations under the 2006 Credit Agreement were guaranteed by all of its subsidiaries.

The 2006 Credit Agreement contains terms and conditions customary for financing arrangements of this nature. The revolving credit facility will mature on June 7, 2012. As of June 30, 2011, the Company was in compliance with all of its required covenants.

During the quarter ended March 31, 2011, the Company made an Excess Cash Flows Payment (as defined in the 2006 Credit Agreement) under the 2006 Credit Agreement in an amount equal to $9.3 million and principal payments in an amount equal to $8.7 million.