Urban One, Inc. completed a large‑scale debt repurchase, tendering $476 million of its 7.375% Senior Secured Notes due 2028—97.6% of the outstanding principal—while simultaneously issuing $60.6 million of new 10.500% First Lien Senior Secured Notes due 2030. The company offered up to $185 million in cash for the existing notes, and the tender was oversubscribed, leading to a pro‑rata allocation of the cash offer. The transaction also included a $498,000 exchange consideration paid to participants who tendered notes under the exchange offer only or the combined exchange and subscription offer.
The repurchase allows Urban One to retire a substantial portion of its 2028 debt at a discount, reducing near‑term leverage and freeing cash that can be deployed toward core operations or future growth initiatives. In exchange, the company accepted higher‑rate debt—10.5% versus the 7.375% notes—extending maturities to 2030 and eliminating most restrictive covenants in the amended indenture. This covenant relief provides greater financial flexibility for future financing and operational decisions, a key benefit in a market where advertising revenue is under pressure.
The transaction was driven by a challenging advertising environment. Urban One’s third‑quarter revenue fell 16% year‑over‑year to $92.7 million, with radio revenue down 12.6% to $34.7 million, reflecting a broader decline in DEI‑related advertising and a 40% drop at its Reach Media network. By reducing debt at a discount, the company mitigates the impact of higher interest expense that will result from the new 10.5% notes, while the extended maturity profile aligns debt service with the company’s slower revenue growth trajectory.
Management emphasized that the restructuring supports its deleveraging strategy and preserves capital for strategic investments in its core niche of serving Black and urban consumers. The company’s CEO noted that “the debt exchange positions us to focus on growth opportunities in our core markets while maintaining the financial flexibility needed to navigate a volatile advertising landscape.” The move also signals confidence in the company’s ability to manage higher interest costs, as the new notes’ higher coupon is offset by the elimination of covenants and the expected improvement in cash flow generation.
The settlement of the transaction is contingent on the refinancing or lender consent of Urban One’s asset‑based lending facility, underscoring the importance of liquidity for ongoing operations. With the debt exchange complete, the company is better positioned to pursue strategic initiatives, such as expanding its digital platforms and strengthening its radio and television assets, while maintaining a disciplined approach to cost management.
The overall impact of the transaction is a more balanced capital structure, higher short‑term interest expense, but greater long‑term flexibility and covenant relief, positioning Urban One to navigate current market headwinds and capitalize on future opportunities in its niche media market.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.