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Cumulus, unit sue administrative agent over credit deal


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Cumulus, unit sue administrative agent over credit deal

Cumulus Media Inc. and its unit Cumulus Media Holdings Inc. took JPMorgan Chase Bank NA to court over its role as an administrative agent under an amended and restated credit agreement.

In a lawsuit filed Dec. 12 in the U.S. District Court in the Southern District of New York, the company claimed that the JPMorgan Chase & Co. unit unreasonably withheld consent to certain components of the company's refinancing, which is intended to deleverage the company by up to $305 million.

Cumulus is seeking an order of specific performance that requires JPMorgan to comply with its contractual obligation to consent to the company's refinancing, and to sign agreements that assign the credit agreement's revolving loan commitments to new revolving lenders. Also, the company has asked the court to order the administrative agent to sign an amendment to increase the total principal amount of revolving credit available under the credit agreement by up to $105 million; and to sign an amendment to modify the leverage ratio covenant, among other things, relating to the credit agreement's revolving credit facility.

Further, the company believes that all of these actions are authorized under the credit agreement, according to a Form 8-K filed Dec. 13.

In other news, Cumulus Media started a private exchange offer for any and all 7.75% senior notes due 2019 issued by unit Cumulus Media Holdings.

If 100% of the aggregate principal amount of the outstanding notes is tendered and accepted in the exchange offer, former noteholders will hold about 33.3% of the common equity of the company upon closing of the offer, and the company will have retired $610 million in outstanding unsecured debt represented by the outstanding notes and incurred $305 million in secured debt represented by the revolving loans under the company's existing credit agreement, according to a Dec. 13 SEC filing.