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Entercom Communications Corp. (“Entercom” or the “Company”) (NYSE: ETM) announced today that its wholly owned finance subsidiary Entercom Radio, LLC (“Entercom Radio”) has priced $220 million aggregate principal amount of 10½% senior notes due 2019 (“Notes”) in a private placement. The Notes will be sold at a price equal to 98.672% of their face value. The sale of the Notes is expected to close on November 23, 2011, subject to customary closing conditions.
The sale of the Notes is contingent upon the entry into a new $425 million senior secured credit facility (the “New Credit Facility”) by Entercom Radio, as borrower, which will be guaranteed by Entercom and certain of Entercom Radio’s existing and future subsidiaries. The New Credit Facility consists of a new revolving credit facility in an aggregate amount of $50 million outstanding at any time and a new term loan (“New Term Loan”) in an aggregate amount of $375 million. Borrowings under the New Term Loan may be made at LIBOR plus an initial spread of 5.0% or at a base rate plus an initial spread of 4.0%, provided that there will be a LIBOR floor of 1.25%. Entercom Radio intends to use the net proceeds from the offering, together with initial borrowings under the New Credit Facility and cash and cash equivalents, to repay its existing senior secured credit facilities and to pay fees and expenses in connection with the offering and the New Credit Facility.
The Notes will be guaranteed on a senior unsecured basis by Entercom and all of Entercom Radio’s existing and future domestic, restricted subsidiaries that guarantee Entercom Radio’s debt under its New Credit Facility, other than Entercom Radio’s subsidiaries that hold no material assets other than Entercom’s FCC licenses, which will guarantee the Notes on a senior subordinated basis.
The Notes, the Entercom guarantee and the subsidiary guarantees have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements. This offering will be made only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act.