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LONG-TERM DEBT (Block) | 9 Months Ended
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Sep. 30, 2016
Debt Disclosure [Abstract] |
Debt Disclosure Text Block | 4. LONG-TERM DEBT Refinancing On November 1, 2016, the Company and its wholly owned subsidiary, Entercom Radio LLC, entered into a $540 million credit agreement (the “New Credit Facility”) with a syndicate of lenders and used the proceeds to: (1) refinance its senior secured credit facility (the “Credit Facility”) that was comprised of: (a) a $223.0 million outstanding term loan component (“Term B Loan”); and (b) $3.0 million outstanding under its revolving credit facility (the “Revolver”); (2) fund the redemption effective December 1, 2016 of $220.0 million 10.5% Senior Notes due December 1, 2019 (the “Senior Notes”) and discharged the indenture (the “Indenture”) governing the Senior Notes; (3) fund $11.6 million of accrued interest and a call premium of $5.8 million on the Senior Notes; and (4) pay transaction co sts associated with the refinancing. In the fourth quarter of 2016, the Company expects to record debt extinguishment costs related to the refinancing. The New Credit Facility is comprised of a revolving credit facility and a term B loan. The $60 million revolving credit facility (the “New Revolver”) has a maturity date of November 1, 2021 and provides for interest based upon the prime rate or the European London Interbank Offered Rate (“LIBOR”) plus a margin. The margin may increase or decrease based upon the Company’s Consolidated Leverage Ratio as defined in the agreement. The initial margin is at LIBOR plus 3.5% or the prime rate plus 2.5%. In a ddition, the New Revolver requires the payment of a commitment fee of 0.5% per annum for the unused amount. The $480 million term B loan (the “New Term B Loan”) has a maturity date of November 1, 2023 and provides for interest based upon the Base Rate or LIBOR, plus a margin. The initial rate is at LIBOR plus 3.5%, with a LIBOR floor of 1.0%, or the Base R ate plus 2.5%. T he Base Rate is the highest of: (a) the administrative agent’s prime rate; (b) the Federal Funds Rate plus 0.5%; or (c) the LIBOR Rate plus 1.0%. The facility amortizes: (1) with equal quarterly installments of principal in annual amounts equal to 1.0% of the original principal amount of the New Term B Loan; and (2) mandatory yearly prepayments based upon a percentage of Excess Cash Flow as defined in the loan agreement. The Company expects to use the New Revolver to: (1) provide for working capital; and (2) provide for general corporate purposes, including capital expenditures and any or all of the following (subject to certain restrictions): repurchases of Class A common stock, repurchases of preferred stock, dividends, investments and acquisitions. The New Credit Facility is secured by a pledge of 100% of the capital stock and other equity interest in all of the Company’s wholly owned subsidiaries. In addition, the New Credit Facility is secured by a lien on substantially all of the Company’s assets with limited exclusions (including the Company’s real property). The Company’s parent, Entercom Communications Corp., and all of the Company’s subsidiaries, jointly and severally guaranteed the New Credit Facility. The assets securing the New Credit Facility a re subject to customary release provisions which would enable the Company to sell such assets free and clear of encumbrance, subject to certain conditions and exceptions. The New Credit Facility has usual and customary covenants including, but not limite d to, consolidated leverage ratios, consolidated interest coverage ratios, limitations on acquisitions, stock repurchases, additional borrowings, and dividends. Specifically, the New Credit Facility requires the Company to comply with certain financial co venants which are defined terms within the agreement, including: a maximum Consolidated Leverage Ratio that cannot exceed 5.0 times through December 31, 2017, which decreases over time to 4.5 times as of September 30, 2018 and thereafter; and a minimum Consolidated Interest Coverage Ratio of 2.0 times (applicable only to the New Revolver). A s of September 30, 2016, the Company was in compliance with all financial covenants then applicable and all other terms of the Credit Facility in all material respects. As of the refinancing, the Company was in compliance with all financial covenants then applicable and all other terms of the New Credit Facility in all material respects. The Company’s ability to maintain compliance with its covenants under the New Credit Facility is highl y dependent on its results of operations. Management believes that over the next 12 months the Company can continue to maintain compliance. Failure to comply with the Company’s financial covenants or other terms of its New Credit Facility and any subsequent failure to negotiate and obtain any required relief from its lenders could result in a default under the New Credit Facility. Any event of default could have a material adverse effect on the Company’s business and financial condition. The acceleration of the Company’s debt could have a material adverse effect on its business. The Company may seek from time to time to a mend its New Credit Facility or obtain other funding or additional funding, which may result in higher interest rates on its debt. Long-term debt was comprised of the following as of September 30, 2016:
|  |  |  | Long-Term Debt
|  |  |  | September 30, |  | December31,
|  |  |  | 2016 |  | 2015
|  |  |  |  | (amounts in thousands)
| Credit Facility |  |  |  |  |  |
|  | Revolver, due November 23, 2016 |  | $ | - |  | $ | 26,000
|  | Term B Loan, due November 23, 2018 |  |  | 225,000 |  |  | 242,750
|  |  |  |  | 225,000 |  |  | 268,750
| Senior Notes |  |  |  |  |  |
|  | 10.5% senior unsecured notes, due December 1, 2019 |  |  | 220,000 |  |  | 220,000
|  | Unamortized original issue discount |  |  | (1,451) |  |  | (1,731)
|  |  |  |  | 218,549 |  |  | 218,269
| Other Debt |  |  |  |  |
|  | Capital lease and other |  |  | 90 |  |  | -
Total debt before deferred financing costs |  |  | 443,639 |  |  | 487,019
| Current amount of long-term debt |  |  | (6,640) |  |  | (31,832)
| Deferred financing costs (excludes the revolving credit) |  |  | (4,728) |  |  | (6,463)
Total long-term debt, net of current debt |  | $ | 432,271 |  | $ | 448,724
Outstanding standby letters of credit |  | $ | 670 |  | $ | 670
(A) Senior Debt The Credit Facility As of September 30, 2016, the amount outstanding under the Credit Facility’s Term B Loan was $225.0 million and there was no amount outstanding under the Revolver. The amount available under the Revolver, which includes the impact of outstanding letters of credit, was $39.3 million as of September 30, 2016. On November 23, 2011, the Company entered into its prior credit agreement with a syndicate of lenders for a $425 million Credit Facility that was initially comprised of: (a) a $50 million Revolver (reduced to $40 million in December 2015) that was due to mature on November 23, 2016; and (b) a $375 million Term B Loan that was due to mature on November 23, 2018. The Term B Loan required mandatory prepayments equal to a percentage of Excess Cash Flow, which was defined within the agreement and was subject to incremental step-downs depending on the consolidated Leverage Ratio. The payment was due in the first quarter of each year for the prior year and was included under the current portion of long-term debt, net of any prepayments made through September 30, 2016. For purposes of presenting the September 30, 2016 finan cial statements, the estimate of the Excess Cash Flow reflects the amount due under the Credit Facility in the first quarter of 2017. Under the New Credit Facility, however, the first such Excess Cash Flow payment, if any, will be due in the first quarter of 2018. (B) Senior Unsecured Debt The Senior Notes In connection with the refinancing described above, on November 1, 2016, the Company issued a call notice and funded the redemption of its $220.0 million Senior Notes due December 1, 2019 and discharged the Indenture governing the Senior Notes. The effective date of the Senior Notes redemption is December 1, 2016. As background, o n November 23, 2011, the Company issued $220.0 million of 10.5% unsecured Senior Notes which matu re on December 1, 2019. The Company received net proceeds of $212.7 million, which include d a discount of $2.9 million, and incurred deferred financing costs of $6.1 million. These amounts are amortized over the term under the effective interest rate method. Interest on the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year. (C) Net Interest Expense The components of net interest expense are as follows:
|  | Net Interest Expense
|  | Nine Months Ended
|  | September 30,
|  | 2016 |  | 2015
|  | (amounts in thousands)
Interest expense |  | $ | 25,382 |  | $ | 25,919
Amortization of deferred financing costs |  |  | 1,929 |  |  | 2,153
Amortization of original issue discount of senior notes |  |  | 280 |  |  | 251
Interest income and other investment income |  |  | (38) |  |  | -
Total net interest expense |  | $ | 27,553 |  | $ | 28,323
|  | Net Interest Expense
|  | Three Months Ended
|  | September 30,
|  | 2016 |  | 2015
|  |  | (amounts in thousands)
Interest expense |  | $ | 8,324 |  | $ | 8,915
Amortization of deferred financing costs |  |  | 611 |  |  | 730
Amortization of original issue discount of senior notes |  |  | 96 |  |  | 86
Interest income and other investment income |  |  | (17) |  |  | -
Total net interest expense |  | $ | 9,014 |  | $ | 9,731

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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