v3.20.1

LONG-TERM DEBT | 3 Months Ended
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Mar. 31, 2020
Debt Disclosure [Abstract] |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt was comprised of the following as of the periods indicated:
| Long-Term Debt |  |
| March 31, 2020 |  | December 31, 2019
| (amounts in thousands) |  |
Credit Facility |  |  |
Revolver | $ | 243,749 |  |  | $ | 117,000 |
Term B-2 Loan, due November 17, 2024 | 758,122 |  |  | 770,000 |
Plus unamortized premium | 1,896 |  |  | 1,968 |
| 1,003,767 |  |  | 888,968 |
Notes |  |  |
6.500% notes due May 1, 2027 | 425,000 |  |  | 425,000 |
Plus unamortized premium | 4,830 |  |  | 5,000 |
| 429,830 |  |  | 430,000 |
Senior Notes |  |  |
7.25% senior unsecured notes, due November 1, 2024 | 400,000 |  |  | 400,000 |
Plus unamortized premium | 11,125 |  |  | 11,732 |
| 411,125 |  |  | 411,732 |
Other debt | 807 |  |  | 873 |
Total debt before deferred financing costs | 1,845,529 |  |  | 1,731,573 |
Current amount of long-term debt | (5,488) |  |  | (16,377) |
Deferred financing costs (excludes the revolving credit) | (17,222) |  |  | (18,082) |
Total long-term debt | $ | 1,822,819 |  |  | $ | 1,697,114 |
Outstanding standby letters of credit | $ | 6,251 |  |  | $ | 5,862 |
(A) Senior Debt 2019 Refinancing Activities - The Notes During the second quarter of 2019, the Company and its finance subsidiary, Entercom Media Corp., issued $325.0 million in aggregate principal amount of senior secured second-lien notes due 2027 (the "Initial Notes") under an indenture dated as of April 30, 2019 (the "Base Indenture"). Interest on the Initial Notes accrues at the rate of 6.500% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year. Until May 1, 2022, only a portion of the Initial Notes may be redeemed at a price of 106.500% of their principal amount plus accrued interest. The prepayment premium continues to decrease over time to 100% of their principal amount plus accrued interest. The Company used net proceeds of the offering, along with cash on hand and $89.0 million borrowed under its Revolver, to repay $425.0 million of existing indebtedness under the Company's term loan component previously outstanding (the "Term B-1 Loan"). During the fourth quarter of 2019, the Company and its finance subsidiary, Entercom Media Corp., issued $100.0 million of additional 6.500% senior secured second-lien notes due 2027 (the "Additional Notes"). The Additional Notes were issued as additional notes under the Base Indenture, as supplemented by a first supplemental indenture dated December 13, 2019 (the "First Supplemental Indenture"), and, together with the Base Indenture (the "Indenture"). The Additional Notes are treated as a single series with the $325.0 million Initial Notes (together, with the Additional Notes, the "Notes") and have substantially the same terms as the Initial Notes. The Additional Notes were issued at a price of 105.0% of their principal amount, plus accrued interest from November 1, 2019. The premium on the Notes will be amortized over the term under the effective interest rate method. As of any reporting period, the unamortized premium on the Notes is reflected on the balance sheet as an addition to the $425.0 million Notes. The Company used net proceeds of the Additional Notes offering to repay $96.7 million of existing indebtedness under the Company's Term B-1 Loan. Contemporaneous with this partial pay-down of the Term B-1 Loan, the Company replaced the remaining amount outstanding under the Term B-1 Loan with a Term B-2 loan (the "Term B-2 Loan"). The Notes are fully and unconditionally guaranteed on a senior secured second-lien basis by most of the direct and indirect subsidiaries of Entercom Media Corp. The Notes and the related guarantees are secured on a second-lien priority basis by liens on substantially all of the assets of Entercom media Corp. and the guarantors. A default under the Company's Notes could cause a default under the Company's Credit Facility or Senior Notes. Any event of default, therefore, could have a material adverse effect on the Company's business and financial condition. The Notes are not a registered security and there are no plans to register the Notes as a security in the future. As a result, Rule 3-10 of Regulation S-X promulgated by the SEC is not applicable and no separate financial statements are required for the guarantor subsidiaries. The Credit Facility Immediately following the 2019 refinancing activities described above, the Company's credit agreement (the "Credit Facility"), as amended, was comprised of a $250.0 million Revolver and a $770.0 million Term B-2 Loan. During the three months ended March 31, 2020, the Company: (i) borrowed the full amount available under the Revolver as a precautionary measure to preserve financial flexibility during the COVID-19 pandemic; and (ii) made required excess cash flow payments and quarterly amortization payments due under the Term B-2 Loan. On December 13, 2019, the Company executed an amendment to the Credit Facility ("Amendment No. 4") which, among other things: (i) replaced the Term B-1 Loan with the Term B-2 Loan; (ii) established a new class of revolving credit commitments from a portion of its existing Revolver with a later maturity date; and (iii) made certain other amendments to the Credit Facility. The Company executed Amendment No. 4 which established a new class of revolving credit commitment from a portion of its existing revolving commitments with a later maturity date than the revolving credit commitments immediately prior to the effectiveness of the amendments. All but one of the original lenders in the Revolver agreed to extend the maturity date from November 17, 2022 to August 19, 2024. As a result, approximately $227.3 million (the "New Class Revolver") of the $250.0 million Revolver has a maturity date of August 19, 2024, and approximately $22.7 million (the "Original Class Revolver") of the $250.0 million Revolver has a maturity date of November 17, 2022. The Company expects to use the Revolver to: (i) provide for working capital; and (ii) provide for general corporate purposes, including capital expenditures and any or all of the following (subject to certain restrictions): repurchase of Class A common stock, dividends, investments and acquisitions. In addition, the Credit Facility is secured by a lien on substantially all of the assets (including material real property) of Entercom Media Corp. and its subsidiaries with limited exclusions. Most of the Company’s subsidiaries, jointly and severally guaranteed the Credit Facility. The assets securing the Credit Facility are 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 Term B-2 Loan has a maturity date of November 17, 2024. The Term B-2 Loan amortizes, commencing on March 31, 2020: (i) with equal quarterly installments of principal in annual amounts equal to 1.0% of the original principal amount of the Term B-2 Loan; and (ii) mandatory yearly prepayments based upon a percentage of Excess Cash Flow as defined in the agreement. The Term B-2 Loan requires mandatory prepayments equal to a percentage of Excess Cash Flow, subject to incremental step-downs, depending on the Consolidated Net Secured Leverage Ratio. The Excess Cash Flow payment is based on the Excess Cash Flow and Consolidated Net First-Lien Leverage Ratio for the prior year. The Credit Facility has usual and customary covenants including, but not limited to, a net first lien leverage ratio, restricted payments and the incurrence of additional debt. Specifically, the Credit Facility requires the Company to comply with a certain financial covenant which is a defined term within the agreement, including a maximum Consolidated Net First-Lien Leverage Ratio that cannot exceed 4.0 times at March 31, 2020. In certain circumstances, if the Company consummates additional acquisition activity permitted under the terms of the Credit Facility, the Consolidated Net First-Lien Leverage Ratio will be increased to 4.5 times for a one year period following the consummation of such permitted acquisition. As of March 31, 2020, the Company’s Consolidated Net First Lien Leverage Ratio was 2.5 times. Failure to comply with the Company’s financial covenant or other terms of its Credit Facility and any subsequent failure to negotiate and obtain any required relief from its lenders could result in a default under the Company’s 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 repayment could have a material adverse effect on its business. The Company may seek from time to time to amend its Credit Facility or obtain other funding or additional funding, which may result in higher interest rates. As of March 31, 2020, the Company is in compliance with the financial covenant and all other terms of the Credit Facility in all material respects. The Company’s ability to maintain compliance with its covenant is highly dependent on its results of operations. The cash available from the Revolver is dependent on the Company’s Consolidated Net First-Lien Leverage Ratio at the time of such borrowing. Entercom Media Corp., which is a wholly-owned subsidiary of the Company, holds the ownership in various subsidiary companies that own the operating assets, including broadcasting licenses, permits, authorizations and cash royalties. Entercom Media Corp. is the borrower under the Credit Facility. The assets securing the Credit Facility are 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. Under certain covenants, the Company's subsidiary guarantors are restricted from paying dividends or distributions in excess of amounts defined under the Credit Facility, and the subsidiary guarantors are limited in their ability to incur additional indebtedness under certain restrictive covenants. (B) Senior Unsecured Debt The Senior Notes Simultaneously with entering into the Merger and assuming the Credit Facility on November 17, 2017, the Company also assumed the 7.250% unsecured senior notes (the “Senior Notes”) that were subsequently modified and mature on November 1, 2024 in the amount of $400.0 million. The Senior Notes were originally issued by CBS Radio (now Entercom Media Corp) on October 17, 2016. The deferred financing costs and debt premium on the Senior Notes will be amortized over the term under the effective interest rate method. As of any reporting period, the amount of any unamortized debt finance costs and debt premium costs are reflected on the balance sheet as a subtraction and an addition to the $400.0 million liability, respectively. Interest on the Senior Notes accrues at the rate of 7.250% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year. (C) Net Interest Expense The components of net interest expense are as follows:
| Net Interest Expense |  |
| Three Months Ended March 31, |  |
| 2020 |  | 2019
| (amounts in thousands) |  |
Interest expense | $ | 23,554 |  |  | $ | 25,734 |
Amortization of deferred financing costs | 946 |  |  | 801 |
Amortization of original issue discount (premium) of senior notes | (849) |  |  | (715) |
Interest income and other investment income | (30) |  |  | (600) |
Total net interest expense | $ | 23,621 |  |  | $ | 25,220 |
(D) Interest Rate Transactions The Company from time to time enters into interest rate transactions with different lenders to diversify its risk associated with interest rate fluctuations of its variable-rate debt. Under these transactions, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional principal amount against the variable-rate debt. During the quarter ended June 30, 2019, the Company entered into an interest rate collar transaction in the notional amount of $560.0 million to hedge the Company’s exposure to fluctuations in interest rates on its variable-rate debt. Refer to Note 9, Derivative and Hedging Activities, for additional information.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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