Item 1.01. Entry into a Material Definitive Agreement.
7.375% Senior Secured Notes due 2028
On January 25, 2021, Urban One, Inc. (the "Company") completed the previously
announced sale of $825.0 million aggregate principal amount of 7.375% Senior
Secured Notes due 2028 (the "New Notes"). The New Notes are governed by an
indenture, dated January 25, 2021 (the "Indenture"), by and between the Company,
the guarantors therein (the "Guarantors") and Wilmington Trust, National
Association, as trustee (in such capacity, the "Trustee") and as notes
collateral agent (in such capacity, the "Notes Collateral Agent").
The Company used the net proceeds from the sale of the Notes together with cash
on hand, to repay or redeem (1) the loans that were outstanding under that
certain Credit Agreement, dated as of April 18, 2017, by and among the Company,
various lenders party thereto, Guggenheim Securities Credit Partners, LLC, as
administrative agent, and The Bank of New York Mellon, as collateral agent, (2)
the Company's 8.750% Senior Secured Notes due 2022, (3) the Company's 7.375%
Senior Secured Notes due 2022, (4) the loans that were outstanding under that
certain Credit Agreement, dated as of December 4, 2018, by and among the
Company, the various lenders party thereto, Wilmington Trust, National
Association, as administrative agent and TCG Senior Funding L.L.C., as sole lead
arranger and bookrunner, and (5) the loans that were outstanding under that
certain Credit Agreement, dated as of December 4, 2018, by and among Urban One
Entertainment SPV, LLC, Radio One Entertainment Holdings, LLC, the various
lenders party thereto, Wilmington Trust, National Association, as administrative
agent and collateral agent, and TCG Senior Funding L.L.C., as sole lead arranger
and bookrunner, and to pay the premium, fees and expenses related thereto. Upon
application of the net proceeds of the Notes, these credit facilities were
terminated and the indentures governing the 7.375% Senior Secured Notes due 2022
and the 8.750% Senior Secured Notes due December 2022 were satisfied and
discharged.
Interest and Maturity
Interest on the New Notes will accrue at the rate per annum equal to 7.375% and
will be payable, in cash, semi-annually on February 1 and August 1 each year,
commencing on August 1, 2021, to holders of record on the immediately preceding
January 15 and July 15, respectively.
The New Notes are the Company's general senior obligations and are guaranteed by
each of the Company's restricted subsidiaries (other than excluded
subsidiaries). The New Notes and the guarantees are secured, subject to
permitted liens and except for certain excluded assets (i) on a first priority
basis by substantially all of the Company's and the Guarantors' current and
future property and assets (other than accounts receivable, cash, deposit
accounts, other bank accounts, securities accounts, inventory and related assets
that secure our asset-backed revolving credit facility on a first priority basis
(the "ABL Priority Collateral")), including the capital stock of each guarantor
(collectively, the "Notes Priority Collateral") and (ii) on a second priority
basis by the ABL Priority Collateral.
Optional Redemption
At any time prior to February 1, 2024, the Company may redeem the Notes in whole
or in part, at its option, upon not less than 10 nor more than 60 days' prior
notice at a redemption price equal to 100% of the principal amount of such
Notes, plus the relevant Applicable Premium, and accrued and unpaid interest, if
any, to, but excluding, the redemption date.
At any time on or after February 1, 2024, the Company may redeem the New Notes,
in whole or in part, upon not less than 10 nor more than 60 days' prior notice,
at a redemption price equal to the percentage of principal amount set forth
below plus accrued and unpaid interest, if any, to the redemption date during
the twelve-month period beginning on February 1 of the year indicated below:
Year Percentage
2024 103.688%
2025 101.844%
2026 and thereafter 100.000%
At any time and from time to time prior to February 1, 2024, the Company may
redeem the New Notes with the net cash proceeds received by the Company from any
Equity Offering (as defined in the Indenture) at a redemption price equal to
107.375% plus accrued and unpaid interest, if any, to the redemption date, in an
aggregate principal amount for all such redemptions not to exceed 40% of the
original aggregate principal amount of the New Notes (including any additional
notes).
In addition, at any time prior to February 1, 2024, but not more than once
during each 12-month period ending February 1, 2022, February 1, 2023 and
February 1, 2024, the Company may redeem up to 10% of the aggregate principal
amount of the New Notes during each such 12- month period upon not less than 10
nor more than 60 days' prior notice, at a redemption price equal to 103.000% of
the principal amount of the notes redeemed plus accrued and unpaid interest, if
any, to the redemption date.
The New Notes are subject to mandatory redemption requirements imposed by gaming
laws and regulations of applicable gaming regulatory authorities.
Restrictive Covenants
The terms of the Indenture, among other things, limit, in certain circumstances,
the ability of the Company and its Restricted Subsidiaries (as defined in the
Indenture) to: incur additional indebtedness; pay dividends or make other
distributions or redeem or repurchase capital stock; prepay, redeem or
repurchase certain junior, unsecured or subordinated debt; make loans and
investments; sell assets; incur liens; enter into transactions with affiliates;
alter the business the Company conducts; enter into agreements restricting the
Company's subsidiaries' ability to pay dividends; and consolidate, merge or sell
all or substantially all of the Company's assets. If the New Notes achieve
investment grade status by both Standard & Poor's Rating Services and Moody's
Investors Service, Inc. and no default has occurred and is continuing, certain
of the covenants under the Indenture will be suspended. If either rating on the
New Notes should subsequently decline to below investment grade, the suspended
covenants will be reinstated.
Change of Control
Upon the occurrence of certain events constituting a change of control as
defined in the Indenture, the Company will be required to make an offer to
repurchase all of the notes at a price equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the
repurchase date, subject to the rights of holders of the New Notes on record on
the relevant record date to receive interest due on the relevant interest
payment date.
Events of Default
The Indenture provides for customary events of default including (subject in
certain cases to customary grace and cure periods), among others: nonpayment of
principal or interest; breach of other agreements in the Indenture; certain
defaults under any mortgage, indenture or instrument under which indebtedness is
or may be issued; certain events of bankruptcy or insolvency; a failure by the
Company or a Significant Subsidiary (as defined in the Indenture) to pay certain
. . .
Item 1.02 Termination of a Material Definitive Agreement
As noted above, the Company used the net proceeds from the sale of the Notes
together with cash on hand, to repay or redeem (1) the loans that were
outstanding under that certain Credit Agreement, dated as of April 18, 2017, by
and among the Company, various lenders party thereto, Guggenheim Securities
Credit Partners, LLC, as administrative agent, and The Bank of New York Mellon,
as collateral agent, (2) the Company's 8.750% Senior Secured Notes due 2022, (3)
the Company's 7.375% Senior Secured Notes due 2022, (4) the loans that were
outstanding under that certain Credit Agreement, dated as of December 4, 2018,
by and among the Company, the various lenders party thereto, Wilmington Trust,
National Association, as administrative agent and TCG Senior Funding L.L.C., as
sole lead arranger and bookrunner, and (5) the loans that were outstanding under
that certain Credit Agreement, dated as of December 4, 2018, by and among Urban
One Entertainment SPV, LLC, Radio One Entertainment Holdings, LLC, the various
lenders party thereto, Wilmington Trust, National Association, as administrative
agent and collateral agent, and TCG Senior Funding L.L.C., as sole lead arranger
and bookrunner, and to pay the premium, fees and expenses related thereto. Upon
application of the net proceeds of the Notes, these credit facilities were
terminated and the indentures governing the 7.375% Senior Secured Notes due 2022
and the 8.750% Senior Secured Notes due December 2022 were satisfied and
discharged.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
Indenture, dated as of January 25, 2021 by and between Urban One, Inc.,
the guarantors therein and Wilmington Trust, National Association, in
4.1 its capacity as the Trustee and Notes Collateral Agent.
Form of 7.375%% Senior Secured Note due 2028 (included as Exhibit A to
4.2 Exhibit 4.1 in this current report on Form 8-K).
Amendment No. 2 to Credit Agreement, dated as of January 25, 2021 by
and among Urban One, Inc. (f/k/a Radio One, Inc.), a Delaware
corporation, Wells Fargo Bank, National Association, as administrative
4.3 agent for the Lenders and the Lenders.
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