v3.24.2.u1

DEBT | 6 Months Ended
--- | ---
Jun. 30, 2024
Debt Disclosure [Abstract] |
DEBT | DEBT Debt was comprised of the following as of the periods indicated:
Debt |  | June 30, 2024 |  | December 31, 2023
|  | (amounts in thousands)
Short-term borrowing: |  |  |  |
DIP Facility(1) |  | $ | 32,000 |  |  | $ | — |
Long-term debt, current: (2) |  |  |  |
Old Credit Facility |  |  |  |
Old Revolver, matures August 19, 2024 |  | 220,126 |  |  | 220,126 |
Old Term B-2 Loan, due November 17, 2024 |  | 632,415 |  |  | 632,415 |
Plus unamortized premium |  | — |  |  | 836 |
|  | 852,541 |  |  | 853,377 |
Old 2027 Notes |  |  |  |
6.500% notes due May 1, 2027 |  | 460,000 |  |  | 460,000 |
Plus unamortized premium |  | — |  |  | 2,477 |
|  | 460,000 |  |  | 462,477 |
Old 2029 Notes |  |  |  |
6.750% notes due March 31, 2029 |  | 540,000 |  |  | 540,000 |
Accounts receivable facility, as amended, matures January 9, 2026 |  | 75,000 |  |  | 75,000 |
Total debt before deferred financing costs |  | 1,959,541 |  |  | 1,930,854 |
Deferred financing costs |  | — |  |  | (6,831) |
Total debt, prior to reclassification to Liabilities subject to compromise |  | 1,959,541 |  |  | 1,924,023 |
Less amounts reclassified to Liabilities subject to compromise |  | (1,852,541) |  |  | — |
Less amount reclassified to Short-term borrowing |  | (32,000) |  |  | — |
Total Long-term debt, net |  | $ | 75,000 |  |  | $ | 1,924,023 |
Outstanding standby letters of credit |  | $ | — |  |  | $ | — |
(1)The scheduled maturity of the DIP Facility will be the earlier of (i) 180-days following the entry of the order entered by the Bankruptcy Court on February 20, 2024 confirming the Plan (the "Confirmation Order") while regulatory approval is pending, (ii) the effective date of the Plan, and (iii) the time determined by an acceleration as a result of an event of default. The Company exercised the 180-day extension option on February 23, 2024. (2)As of December 31, 2023, the Company had $1.9 billion of consolidated debt. The filing of the Chapter 11 Cases on January 7, 2024 constituted an event of default with respect to the Company's existing debt obligations other than the Old Receivables Facility (as defined below), which accounted for $75.0 million of the Company's consolidated debt. As a result of the filing of the Chapter 11 Cases, all such debt of the Debtors (which excludes the accounts receivable facility) became immediately due and payable, but any efforts to enforce such payment obligations were automatically stayed as a result of the Chapter 11 Cases. These debt obligations and substantially all other prepetition obligations of the Debtors are subject to settlement under the Plan which was confirmed by the Bankruptcy Court on February 20, 2024. (A) Prepetition Debt (Historical) The filing of the Chapter 11 Cases constituted an event of default and the Prepetition Debt Instruments (other than the Old Receivables Facility), became immediately due and payable, but any efforts to enforce such payment obligations were automatically stayed as a result of the Chapter 11 Cases, and continues to be stayed. As such, during the six months ended June 30, 2024, the Company reclassified the balance of the Prepetition Debt Instruments (other than the Old Receivables Facility) to Liabilities Subject to Compromise on the balance sheet and wrote off the associated unamortized debt costs and unamortized debt premium to Reorganization items on the condensed consolidated statement of operations. Refer to Note 9, Liabilities Subject to Compromise and Note 10, Reorganization items, net for further information. The Old Credit Facility As of June 30, 2024, the Company's old credit facility, as amended (the "Old Credit Facility"), was comprised of a $227.3 million revolver with an original stated maturity date of August 19, 2024 (the "Old Revolver"), and a $632.4 million term loan with a stated maturity date of November 17, 2024 (the "Old Term B-2 Loan"). As of June 30, 2024, the Company reclassified the balance of the Old Credit Facility to Liabilities Subject to Compromise on the balance sheet and wrote off the associated unamortized debt costs and unamortized debt premium to Reorganization items on the condensed consolidated statement of operations. Refer to Note 9, Liabilities Subject to Compromise and Note 10, Reorganization items, net for further information. The Old 2027 Notes In 2019 and 2021, the Company and its finance subsidiary, Audacy Capital Corp. (“Audacy Capital Corp.”) issued $425.0 million and an additional $45.0 million, respectively, in aggregate principal amount of 6.500% senior secured second-lien notes due May 1, 2027 (the "Old 2027 Notes"). During 2022, the Company repurchased $10.0 million of the Old 2027 Notes through open market purchases. This repurchase activity generated a gain on retirement of the Old 2027 Notes in the amount of $0.6 million. As of any reporting period, the unamortized premium on the Old 2027 Notes is reflected on the balance sheet as an addition to the Old 2027 Notes. Interest on the Old 2027 Notes accrued at the rate of 6.500% per annum and was payable semi-annually in arrears on May 1 and November 1 of each year. As of June 30, 2024, the Company reclassified the balance of the Old 2027 Notes to Liabilities Subject to Compromise on the condensed consolidated balance sheet and wrote off the associated unamortized debt costs and unamortized debt premium to Reorganization items on the condensed consolidated statement of operations. Refer to Note 9, Liabilities Subject to Compromise and Note 10, Reorganization items, net for further information. The Old 2029 Notes In 2021, the Company and Audacy Capital Corp. issued $540.0 million in aggregate principal amount of senior secured second-lien notes due March 31, 2029 (the "Old 2029 Notes"). Interest on the Old 2029 Notes accrues at the rate of 6.750% per annum and was payable semi-annually in arrears on March 31 and September 30 of each year. As of June 30, 2024, the Company reclassified the balance of the Old 2029 Notes to Liabilities Subject to Compromise on the condensed consolidated balance sheet and wrote off the associated unamortized debt costs to Reorganization items on the condensed consolidated statement of operations. Refer to Note 9, Liabilities Subject to Compromise and Note 10, Reorganization items, net for further information. Old Receivables Facility On July 15, 2021, the Company and certain of its subsidiaries, including Audacy Receivables, LLC, a Delaware limited liability company and the Company's wholly-owned subsidiary ("Audacy Receivables") entered into the $75.0 million receivables facility (the "Old Receivables Facility") to provide additional liquidity, to reduce the Company's cost of funds and to repay outstanding indebtedness under the Old Credit Facility. Audacy Receivables is considered a special purpose vehicle ("SPV") as it is an entity that has a special, limited purpose and it was created to sell accounts receivable, together with customary related security and interests in the proceeds thereof, to the investors in exchange for cash investments. The Old Receivables Facility was set to expire on July 15, 2024. The pledged receivables and the corresponding debt are included in Accounts receivable, net and Long-term debt, net of current, respectively, on the Company's condensed consolidated balance sheet. On January 9, 2024, the Company amended its Old Receivables Facility (as described below in the section entitled —New Receivables Facility). (B) Postpetition Debt (Pendency of Chapter 11 Cases) Debtors-in-Possession Facility On January 9, 2024, Audacy Capital Corp. and certain of its subsidiaries entered into a debtor-in-possession facility (the “DIP Facility”) pursuant to a Senior Secured Superpriority Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”) with Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, and the lenders party thereto (collectively, the “DIP Lenders”). The entry into the DIP Credit Agreement was approved by an order of the Bankruptcy Court. Principal Amount. The DIP Credit Agreement provides for a $32.0 million term loan facility, to be used for general corporate purposes, maintenance of minimum operational liquidity, payment of administrative expenses and other operating expenses while in bankruptcy. Interest and Fees. The DIP Facility bears interest at a rate of one-month term SOFR plus an applicable margin of 6.00%, subject to an Alternative Reference Rates Committee (“ARRC”) credit spread adjustment of 0.11448%. Additional fees and expenses under the DIP Facility include (i) a 3.00% backstop premium, (ii) a 2.00% upfront commitment fee and (iii) a 15.00% redemption premium payable in certain circumstances as outlined in the DIP Credit Agreement. Borrowings under the DIP Facility are senior secured obligations of the Debtors, secured by priming first-priority liens on the Collateral (as defined in the DIP Credit Agreement). Covenants. The DIP Credit Agreement has various customary covenants, as well as covenants mandating compliance by the Loan Parties (as defined in the DIP Credit Agreement) with a budget, variance testing and reporting requirements, among others. Maturity. The scheduled maturity of the DIP Facility will be the earlier of (i) 180-days following the entry of the Confirmation Order (which occurred on February 20, 2024), or August 19, 2024 (the first business day following expiration of the 180-day period), while regulatory approval is pending, (ii) the effective date of the Plan, and (iii) the time determined by an acceleration as a result of an event of default. The Company exercised the 180-day extension option on February 23, 2024. If the Plan does not become effective by August 19, 2024, the Company plans to seek a maturity extension of the DIP Facility or an agreement from the DIP Lenders to forbear from exercising remedies under the DIP Facility, in either case through September 30, 2024, as well as related relief under the Restructuring Support Agreement and the New Receivables Facility (as defined below). The DIP Credit Agreement includes certain customary representations and warranties, affirmative covenants and events of default, including but not limited to, payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain debt, certain bankruptcy-related events, certain events under ERISA, material judgments and a change of control. If an event of default occurs, the lenders under the DIP Credit Agreement will be entitled to take various actions, including the acceleration of all amounts due under the DIP Credit Agreement and all actions permitted to be taken under the loan documents or applicable law, subject to the terms of the final order of the Bankruptcy Court approving the entry into the DIP Credit Agreement. As of June 30, 2024, the Company has borrowed the entirety of the $32.0 million of available loans under the DIP Facility. On the effective date of the Plan, the Company expects to convert certain outstanding amounts owing under the DIP Credit Agreement, as well as certain other prepetition obligations, into loans under the anticipated credit facility upon emergence from Chapter 11 protection in accordance with the terms of the Plan. See our 2023 Annual Report, Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Anticipated Post-Emergence Debt." As of June 30, 2024, the Company was compliant with the DIP Credit Agreement and related financial covenants, in all material respects. The Company recorded the DIP Facility to Short-term borrowing and expensed $2.5 million of financing fees in connection with the DIP Facility to Reorganization items, net on the condensed consolidated statement of operations. Refer to Note 10, Reorganization items, net for further information. New Receivables Facility On January 9, 2024, the Company amended the Old Receivables Facility agreements to, among other things, increase the available financing limit from $75.0 million to $100.0 million, extend the facility revolving period termination date from July 15, 2024 to January 9, 2026, and remove the financial covenants for the period of the Chapter 11 Cases (the “New Receivables Facility”). The New Receivables Facility was approved by an order of the Bankruptcy Court. The terms of the New Receivables Facility are substantially similar to the terms of the Old Receivables Facility, subject to certain amendments relating to the Chapter 11 Cases. This New Receivables Facility is recorded in Long Term Debt in our condensed consolidated balance sheet. Audacy Receivables, which is the seller under the New Receivables Facility is considered an SPV as it is an entity that has a special, limited purpose and it was created to sell accounts receivable, together with customary related security and interests in the proceeds thereof, to the investors in exchange for cash investments. The Company continues to use the New Receivables Facility to provide day-to-day operating liquidity during the Chapter 11 Cases and to enable it to continue its business operations in the ordinary course. As of June 30, 2024, the SPV has $241.4 million of net accounts receivable and $75.0 million of outstanding principal investments under the New Receivables Facility. The revolving period under the New Receivables Facility expires on January 9, 2026. The New Receivables Facility will remain effective through the new amended maturity date, unless on the effective date of the plan, certain specified exit conditions, including certain amendments, are not satisfied. The Company expects to fulfill the exit conditions of the New Receivables Facility and to keep the New Receivables Facility in place following the effective date of the Plan. See our 2023 Annual Report, Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Anticipated Post-Emergence Debt." As of June 30, 2024, the Company was compliant with the New Receivables Facility and related financial covenants, in all material respects. Liquidity As of June 30, 2024, total liquidity was $126.5 million and consisted of cash and cash equivalents of $101.5 million (excluding restricted cash of $4.1 million) and remaining availability under the New Receivables Facility of $25.0 million. (C) Net Interest Expense In connection with the Debtor’s voluntary filing under Chapter 11, interest was stayed on the Company’s Old Credit Facility, Old 2027 Notes and Old 2029 Notes. Therefore, the Company did not accrue interest expense of approximately $34.2 million for the three months ended June 30, 2024 and $65.8 million for the period from January 8 through June 30, 2024. The components of net interest expense are as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
Net Interest Expense |  | 2024 |  | 2023 |  | 2024 |  | 2023
|  | (amounts in thousands)
Interest expense |  | $ | 2,616 |  |  | $ | 32,627 |  |  | $ | 7,773 |  |  | $ | 64,000 |
Amortization of deferred financing costs |  | 233 |  |  | 2,176 |  |  | 443 |  |  | 3,441 |
Amortization of original issue premium of Senior Notes |  | — |  |  | (255) |  |  | — |  |  | (512) |
Interest income and other investment income |  | (90) |  |  | — |  |  | (90) |  |  | — |
Total net interest expense |  | $ | 2,759 |  |  | $ | 34,548 |  |  | $ | 8,126 |  |  | $ | 66,929 |

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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/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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