Cumulus Media is facing backlash from some of its lenders over a debt-exchange proposal that would push existing creditors down the repayment line if they don’t participate, Bloomberg News reported. The proposal, announced on Tuesday, calls for a debt swap at below-par prices. Non-participating creditors would also see collateral moved away from them — a sore spot for some debtholders because the value of the loan would diminish. A group of creditors holding secured debt retained Gibson Dunn & Crutcher and plan to bring in a financial adviser to evaluate the proposal. Bank of America Corp. is working with the company on the debt exchanges. Cumulus joins a long list of U.S. companies with distressed debt undertaking contentious maneuvers to reduce their debt load. Software firm GoTo Group Inc. recently reached a deal with a majority of its creditors that would extend its debt maturities and rework the pecking order for creditor payouts. Apex Tool Group also struck a deal with some of its lenders that would give the firm fresh capital while allowing a handful of creditors to jump ahead in the repayment line. The radio-broadcasting operator is asking creditors to swap its 6.75% first-lien notes into longer-dated, higher-coupon debt. The company is also looking to exchange its term loan for new debt, according to a press release. Its nearly $346 million first-lien bonds traded at 60.75 cents on Monday, according to Trace. Cumulus’ roughly $328
million first-lien loan due in 2026 is quoted at around 72.63 cents on the dollar, according to data compiled by Bloomberg. Holders of each tranche of both the notes and the loan are being asked to swap at around 80 cents on the dollar.
