Liberty’s Grip On iHeart Grows Stronger

• With rumblings growing louder that iHeartMedia Inc. is headed toward a bankruptcy filing as soon as this weekend, the situation just became more interesting — Bloomberg is reporting GSO Capital Partners, the credit unit of Blackstone Group, which had played a key role in restructuring talks over iHeartMedia’s debt, has exited its position, selling roughly $400 million of iHeart debt to John Malone‘s Liberty Media. Malone’s company has accumulated a position in the debt to inject itself into restructuring talks for iHeart in an effort to take control of its radio business. GSO, along with Franklin Resources had until recently been the leading force in a senior lender group negotiating with iHeart. The company’s talks with holders have extended well over a year without a resolution.

Last weekend, Liberty Media, the majority stockholder of SiriusXM submitted a lengthy term sheet “to certain of [iHeartMedia’s] lenders and noteholders” containing an ambitious blueprint to achieve a restructured iHeartMedia, Inc. Liberty proposed a $1.159 billion cash investment in a reorganized iHeartMedia, and, in exchange, according to the term sheet, “20% of the New Common Shares shall be held by Sirius and 20% of the New Common Shares shall be held by Liberty Media.” The plan also calls for “[Clear Channel] Outdoor shall be spun off in a taxable transaction. And now we wait…