• The Wall Street Journal, Wednesday, September 2, 2009 10:40 PM

Lenders are breathing down the necks of some debt-burdened radio broadcasters. Radio companies are being forced to renegotiate loan terms, often resulting in higher interest or other penalties.

Citadel Broadcasting, for instance, got a waiver for its leverage requirements through the end of 2009. But the company skipped a $2 million interest payment on its subordinated debt due Aug. 15 and is negotiating with senior debtholders about "what the next step should be," says Citadel CEO Farid Suleman. "All options are on the table," including prepackage bankruptcy, debt restructuring and another amendment to the company's credit agreement.

Emmis Communications, with 22 stations, recently had to renegotiate agreements with lenders because of declining revenue. Cumulus Media, with 314 stations, renegotiated agreements with lenders at the end of June. Both it and Emmis got leverage ratios suspended in exchange for tighter restrictions such as prepaying excess cash to their borrowers. Clear Channel, owned by CC Media Holdings, will just squeak by its covenant requirements this year.

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