<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 18, 1999
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------
HISPANIC BROADCASTING CORPORATION
(FORMERLY HEFTEL BROADCASTING CORPORATION)
(Exact name of Registrant as specified in its charter)
------------------------------
<TABLE>
<S> <C>
DELAWARE 99-0113417
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
------------------------------
HBC CAPITAL TRUST I
HBC CAPITAL TRUST II
(Exact name of Registrant as specified in its charter)
------------------------------
<TABLE>
<S> <C>
DELAWARE 75-6514061
(State or other jurisdiction of 75-6514063
incorporation or organization) (I.R.S. Employer
Identification No.)
</TABLE>
------------------------
3102 OAK LAWN AVE., SUITE 215
DALLAS, TEXAS 75219
(214) 525-7700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices for each registrant)
------------------------------
MCHENRY T. TICHENOR, JR.
HISPANIC BROADCASTING CORPORATION
3102 OAK LAWN AVE., SUITE 215
DALLAS, TEXAS 75219
(214) 525-7700
(Name, address, including zip code, and telephone number, including area code,
of agent for service for each registrant)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
STEPHEN C. MOUNT, ESQ. JOHN W. WHITE, ESQ.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. CRAVATH, SWAINE & MOORE
1500 BANK OF AMERICA PLAZA WORLDWIDE PLAZA
300 CONVENT STREET 825 EIGHTH AVENUE
SAN ANTONIO, TEXAS 78205 NEW YORK, NEW YORK 10019
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering./ /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
(CALCULATION TABLE ON NEXT PAGE)
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1)(2)
<S> <C> <C> <C>
PRIMARY OFFERING:
Debt securities and junior subordinated debt
securities of Hispanic Broadcasting (4)(7)...
Preferred stock of Hispanic Broadcasting (5)(7)...
Class A common stock of Hispanic
Broadcasting(6)(7)..................
Warrants of Hispanic Broadcasting(8)... (3) (3) (3)
Preferred securities of HBC Capital Trust I and
HBC Capital Trust II (9)............
Guarantees of the preferred securities of the HBC
Trusts by Hispanic Broadcasting(10)...
Stock purchase contracts of Hispanic Broadcasting
(11)................................
Stock purchase units(12)..............
Total(13)........................... $1,361,125,000(13) 100% $1,361,125,000(13)
SECONDARY OFFERING:
Class A common stock (14)............. 400,000 shares(14) $80.50(14) $32,200,000(14)
TOTAL: N/A N/A $1,393,325,000
<CAPTION>
AMOUNT OF
REGISTRATION
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED FEE
<S> <C>
PRIMARY OFFERING:
Debt securities and junior subordinated debt
securities of Hispanic Broadcasting (4)(7)...
Preferred stock of Hispanic Broadcasting (5)(7)...
Class A common stock of Hispanic
Broadcasting(6)(7)..................
Warrants of Hispanic Broadcasting(8)... (3)
Preferred securities of HBC Capital Trust I and
HBC Capital Trust II (9)............
Guarantees of the preferred securities of the HBC
Trusts by Hispanic Broadcasting(10)...
Stock purchase contracts of Hispanic Broadcasting
(11)................................
Stock purchase units(12)..............
Total(13)........................... $378,393
SECONDARY OFFERING:
Class A common stock (14)............. $8,952
TOTAL: $387,345
</TABLE>
(1) The registrants will determine the proposed maximum offering price per unit
from time to time in connection with issuances of the securities registered
hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457 under
the Securities Act.
(3) Not applicable pursuant to General Instruction II.D of Form S-3.
(4) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of debt securities or junior subordinated
debt securities of Hispanic Broadcasting as may be sold, from time to time.
If any debt securities or junior subordinated debt securities are issued at
an original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price not
to exceed $1,500,000,000.
(5) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of preferred stock of Hispanic Broadcasting
as may be sold, from time to time.
(6) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of Class A common stock of Hispanic
Broadcasting as may be sold from time to time.
(7) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of debt securities and junior subordinated
debt securities, and an indeterminate number of shares of preferred stock
and Class A common stock of Hispanic Broadcasting, as shall be issuable upon
conversion or redemption, or upon the exercise of Warrants of Hispanic
Broadcasting registered hereunder of debt securities and junior subordinated
debt securities, preferred stock or Class A common stock of Hispanic
Broadcasting or preferred securities of the HBC Trusts, as the case may be,
registered hereunder.
(8) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of warrants of Hispanic Broadcasting,
representing rights to purchase certain of the debt securities and junior
subordinated debt securities, preferred stock or Class A common stock of
Hispanic Broadcasting registered hereunder.
(9) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of the preferred securities as may be sold
from time to time.
(10) No separate consideration will be received for the Guarantees of the
preferred securities. The Guarantees include the right of holders of
preferred securities under the Guarantees and certain back-up undertakings,
as described in the Registration Statement.
(11) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of stock purchase contracts, representing
rights (and obligations) to purchase Class A common stock or preferred
stock.
(12) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of stock purchase units, representing
ownership of stock purchase contracts and debt securities or junior
subordinated debt securities or U.S. Treasury Securities.
(13) In no event will the aggregate offering price of all securities issued from
time to time pursuant to this registration statement exceed $1,500,000,000
or the equivalent thereof in one or more foreign currencies, foreign
currency units or composite currencies. In accordance with Rule 429 under
the Securities Act of 1933, the prospectus included herein is a combined
prospectus which also relates to Hispanic Broadcasting's registration
statement on Form S-3, File No. 333-45171, filed on December 12, 1997. This
registration statement is a new registration statement and constitutes the
first post-effective amendment to Hispanic Broadcasting's December 12, 1997
registration statement. Such post-effective amendment shall hereafter become
effective concurrently with the effectiveness of this registration statement
in accordance with Section 8-A of the Securities Act of 1933. The amount of
securities eligible to be sold under the December 12, 1997 registration
statement ($138,875,000 on October 15, 1999) shall be carried forward to
this registration statement. The amount of the filing fee associated with
such securities that was previously paid with the December 12, 1997
registration statement is $40,968. The aggregate amount of Class A common
stock of Hispanic Broadcasting registered hereunder is further limited to
that which is permissible under Rule 415(a)(4) under the Securities Act. The
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(14) Pursuant to Rule 457(c), the offering price and registration fee are
computed on the basis of the average of the high and low prices of the
Class A common stock, as reported by the Nasdaq National Market on
October 15, 1999. The number of shares eligible to be sold under the
December 12, 1997 registration statement (125,000 on October 15, 1999) shall
be carried forward to this registration statement. The amount of the filing
fee associated with such securities that was previously paid with the
December 12, 1997 registration statement is $1,518.
<PAGE>
SUBJECT TO COMPLETION OCTOBER 18, 1999
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
$1,500,000,000
HISPANIC BROADCASTING CORPORATION
(FORMERLY HEFTEL BROADCASTING CORPORATION)
HBC CAPITAL TRUST I
HBC CAPITAL TRUST II
We will offer and sell, from time to time, in one or more offerings, the
debt and equity securities described in this prospectus. The total offering
price of these securities, in the aggregate, will not exceed $1.5 billion. We
will provide specific terms of these securities in supplements to this
prospectus. You should carefully read this prospectus and the supplements before
deciding to invest in these securities.
HISPANIC BROADCASTING CORPORATION
We will offer and sell, from time to time, in one or more offerings:
<TABLE>
<S> <C>
- Class A common stock - warrants
- debt securities - stock purchase contracts
- junior subordinated debt securities - stock purchase units
- preferred stock - guarantees
</TABLE>
The stock purchase contracts will require a purchaser to buy a specific
amount of common stock or preferred stock, and they will obligate Hispanic
Broadcasting to pay specific fees to the purchasers. The stock purchase units
will include these stock purchase contracts and debt securities, junior
subordinated debt securities, debt obligations of the United States of America
or its agencies or instrumentalities, or preferred securities issued by HBC
Capital Trusts I and II. The guarantees will be Hispanic Broadcasting's full,
unconditional guarantees of the HBC Trusts' obligation to distribute specific
amounts of cash to the holders of HBC Trust preferred securities.
THE HBC TRUSTS
The HBC Capital Trusts I and II are each Delaware business trusts that will
offer and sell preferred securities, from time to time in one or more offerings.
Each HBC Trust will use all of the proceeds from the sale of its preferred
securities to buy junior subordinated debt securities of Hispanic Broadcasting.
The HBC Trusts will receive cash payments from the junior subordinated debt
securities, and each trust will distribute these payments to the holders of its
preferred and common securities. Hispanic Broadcasting will own all of the
common securities of the HBC Trusts.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH AN INVESTMENT IN THE
SECURITIES, SEE "GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS" ON PAGE 6.
Concurrently with the filing of this prospectus, we are filing a prospectus
under Rule 415 of the Securities Act of 1933, offering up to 525,000 shares of
Class A common stock to be sold from time to time by named selling stockholders.
Sales under this prospectus are not contingent upon the completion of sales by
any selling stockholder.
THE DATE OF THIS PROSPECTUS IS , 1999.
<PAGE>
EXPLANATORY NOTE
When we refer to Hispanic Broadcasting in this prospectus, we are referring
to Hispanic Broadcasting Corporation. When we refer to the HBC Trusts in this
prospectus, we are referring to the HBC Capital Trusts. When the word "we" "our"
or "us" is used in this prospectus, we are referring to both Hispanic
Broadcasting and the HBC Trusts together. Hispanic Broadcasting recently changed
its name from Heftel Broadcasting Corporation to Hispanic Broadcasting
Corporation, and the names of the capital trusts were changed from Heftel
Capital Trust I and II to HBC Capital Trust I and II.
WHERE YOU CAN FIND MORE INFORMATION
Hispanic Broadcasting files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements, or other information Hispanic
Broadcasting files with the SEC at its public reference rooms in Washington,
D.C. (450 Fifth Street, N.W. 20549), New York, New York (7 World Trade Center,
Suite 1300 10048) and Chicago, Illinois (500 West Madison Street, Suite 1400
60661). Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Hispanic Broadcasting's filings are also available to
the public on the internet, through a database maintained by the SEC at
HTTP://WWW.SEC.GOV. In addition, you can inspect and copy reports, proxy
statements and other information concerning Hispanic Broadcasting at the offices
of the Nasdaq National Market, Report Section, 1735 K Street, N.W., Washington,
D.C. 20006, on which Hispanic Broadcasting's Class A common stock (symbol:
"HBCCA") is listed. Please note that Hispanic Broadcasting recently changed its
name from Heftel Broadcasting Corporation to Hispanic Broadcasting Corporation
and that certain of Hispanic Broadcasting's reports, statements, or other
information incorporated by reference into this prospectus were filed under the
old name.
We filed a registration statement on Form S-3 to register with the SEC the
shares offered by this prospectus. This prospectus is part of that registration
statement. As permitted by SEC rules, this prospectus does not contain all the
information contained in the registration statement or the exhibits to the
registration statement. You may refer to the registration statement and
accompanying exhibits for more information about us and our securities.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them. This means that we can disclose important
business, financial and other information to you by referring you to other
documents separately filed with the SEC. All information incorporated by
reference is part of this prospectus, unless and until that information is
updated and superseded by the information contained in this prospectus or any
information incorporated later.
We incorporate by reference the documents listed below:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
4. Current Report on Form 8-K filed on October 15, 1999.
5. Current Report on Form 8-K filed on October 7, 1999.
6. Current Report on Form 8-K filed on May 28, 1999.
7. Current Report on Form 8-K filed on May 13, 1999.
8. Current Report on Form 8-K filed on April 20, 1999.
9. Current Report on Form 8-K filed on June 4, 1998, as amended by
Form 8-K/A filed on July 31, 1998.
2
<PAGE>
We also incorporate by reference all future filings we make with the SEC
between the date of this prospectus and the date upon which we sell all the
securities we offer with this prospectus.
You may obtain copies of these documents at no cost by requesting them from
us in writing at the following address: Corporate Secretary, Hispanic
Broadcasting Corporation, 3102 Oak Lawn Ave., Suite 215, Dallas, Texas 75219
(telephone (214) 525-7700).
ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration statement that we filed with
the SEC. By using a shelf registration statement, we may sell, from time to
time, in one or more offerings, any combination of the securities described in
this prospectus. The total dollar amount of the securities we sell through these
offerings will not exceed $1.5 billion.
This prospectus only provides you with a general description of the
securities we may offer. Each time we sell securities under this prospectus, we
will provide a prospectus supplement that contains specific information about
the terms of the securities. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the additional
information described under the heading "Where You Can Find More Information."
This prospectus does not contain separate financial statements for the HBC
Trusts. We do not believe these financial statements would be useful since each
trust is a direct or indirect wholly-owned subsidiary of Hispanic Broadcasting,
and we file consolidated financial information under the Exchange Act. The HBC
Trusts will not have any independent function other than to issue common and
preferred securities and to purchase junior subordinated debt securities of
Hispanic Broadcasting. We will provide a full, unconditional guarantee of each
trust's obligations under their respective common and preferred securities.
You should rely only on the information contained or incorporated by
reference in this prospectus and the prospectus supplement. We have not
authorized anyone else to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We will not make an offer to sell these securities in any state where the
offer or sale is not permitted. You should assume that the information appearing
in this prospectus, as well as the information we previously filed with the SEC
and incorporated by reference, is accurate only as of the date of the documents
containing the information.
3
<PAGE>
HISPANIC BROADCASTING CORPORATION
We are one of the largest Spanish language radio broadcasting companies in
the United States and currently own or program radio stations in many of the
largest Hispanic markets in the United States, including Los Angeles, New York,
Miami, San Francisco/San Jose, Chicago, Houston, San Antonio, Dallas/Fort Worth,
San Diego, McAllen/Brownsville/Harlingen, Phoenix, El Paso and Las Vegas. We
recently changed our name from Heftel Broadcasting Corporation to Hispanic
Broadcasting Corporation.
Our strategy is to own and program top performing radio stations,
principally in the largest Spanish language radio markets in the United States.
We intend to acquire or develop additional Spanish language stations in leading
Hispanic markets.
We frequently evaluate strategic opportunities both within and outside our
existing line of business which closely relate to serving the Hispanic market,
including opportunities outside of the United States. We expect to pursue
additional acquisitions from time to time and may decide to dispose of certain
businesses. Such acquisitions or dispositions could be material.
Our principal executive offices are located at 3102 Oak Lawn Ave., Suite
215, Dallas, Texas 75219 (telephone: (214) 525-7700).
THE HBC TRUSTS
Each HBC Capital Trust is a statutory business trust formed under Delaware
law pursuant to a separate declaration of trust executed by Hispanic
Broadcasting, as depositor for such HBC Trust, and the trustees of such trust,
and the filing of a certificate of trust with the Delaware Secretary of State.
The declarations of trust will be amended and restated in their entirety
substantially in the form filed as an exhibit to the registration statement of
which this prospectus is a part and will be qualified as indentures under the
Trust Indenture Act of 1939. Unless the accompanying prospectus supplement
provides otherwise, each HBC Trust exists for the sole purposes of
- issuing its preferred securities,
- investing the gross proceeds of the sale of its preferred securities in
junior subordinated debt securities of Hispanic Broadcasting, and
- engaging in only those other activities necessary or incidental thereto.
All of each HBC Trust's common securities will be owned by Hispanic
Broadcasting. The common securities will rank equally, and payments will be made
thereon pro rata, with the preferred securities, except that upon the occurrence
and continuance of an event of default under the applicable amended and restated
declaration of trust, the rights of the holders of the applicable common
securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the applicable preferred securities. We will acquire common securities having an
aggregate liquidation amount equal to a minimum of 1% of the total capital of
each HBC Trust.
Each HBC Trust will have a term of at least 20 but not more than 50 years,
but may terminate earlier as provided in the applicable amended and restated
declaration of trust. Each HBC Trust's business and affairs will be conducted by
the trustees. Hispanic Broadcasting will be entitled to appoint, remove or
replace any of, or increase or reduce the number of, the trustees of each HBC
Trust. The duties and obligations of the trustees shall be governed by the
amended and restated declaration of trust of each HBC Trust. At least one of the
trustees of each HBC Trust will be a person who is an employee or officer of or
who is affiliated with Hispanic Broadcasting. One trustee of each HBC Trust will
be a financial institution that is not affiliated with Hispanic Broadcasting,
which shall act as property trustee and as indenture trustee for the purposes of
the Trust Indenture Act, pursuant to the
4
<PAGE>
terms set forth in a prospectus supplement. In addition, unless the property
trustee maintains a principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, one trustee of each HBC
Trust will be a legal entity having a principal place of business in, or an
individual resident of, the State of Delaware. Hispanic Broadcasting will pay
all fees and expenses related to each HBC Trust and the offering of the
preferred securities. Unless otherwise set forth in a prospectus supplement, the
property trustee will be The Bank of New York, and the Delaware trustee will be
The Bank of New York (Delaware). The office of the Delaware trustee in the State
of Delaware is 100 White Clay Center, Newark, Delaware 19711. The principal
place of business of each HBC Trust is c/o Hispanic Broadcasting Corporation,
3102 Oak Lawn Ave., Suite 215, Dallas, Texas 75219 (telephone: (214) 525-7700).
RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The ratios of earnings to fixed charges for Hispanic Broadcasting are
computed by dividing pretax income from continuing operations after certain
adjustments, by fixed charges. Fixed charges consist of interest expense on all
long and short-term borrowings and the estimated interest portion of rental
expense. Set forth below are the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends (in thousands
except ratios).
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED THREE MONTHS YEAR ENDED
JUNE 30, DECEMBER 31, ENDED SEPTEMBER 30,
------------------- ---------------------- DECEMBER 31, ------------------------------
1999 1998 1998 1997 1996 1996 1995 1994
-------- -------- -------- -------- ------------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges.......... 19.1 11.6 14.6 7.5 1.7 -- 1.6 1.6
Deficiency of Earnings to Cover
Fixed Charges.................... -- -- -- -- -- $29,092 -- --
Earnings to Combined Fixed Charges
and preferred stock Dividends.... 19.1 11.6 14.6 7.5 1.7 -- 1.6 1.5
Deficiency of Earnings to Cover
Combined Fixed Charges and
Preferred stock Dividends........ -- -- -- -- -- $29,112 -- --
</TABLE>
USE OF PROCEEDS
Unless indicated otherwise in a prospectus supplement, Hispanic Broadcasting
expects to use the net proceeds from the sale of its securities for general
corporate purposes, including repayment of borrowings, working capital, capital
expenditures, stock repurchase programs and acquisitions. Unless otherwise
specified in the accompanying prospectus supplement, each HBC Trust will use all
proceeds received from the sale of its preferred securities to purchase junior
subordinated debt securities of Hispanic Broadcasting.
5
<PAGE>
HOLDING COMPANY STRUCTURE AND SECURED CLAIMS
Hispanic Broadcasting is a holding company and its assets consist primarily
of investments in its subsidiaries, limited liability companies and
partnerships. Hispanic Broadcasting's rights and the rights of its creditors,
including holders of debt securities or junior subordinated debt securities, to
participate in the distribution of assets of any person in which Hispanic
Broadcasting owns an equity interest will be subject to prior claims of the
person's creditors upon the person's liquidation or reorganization. However,
Hispanic Broadcasting may itself be a creditor with recognized claims against
this person, but claims of Hispanic Broadcasting would still be subject to the
prior claims of any secured creditor of this person and of any holder of
indebtedness of this person that is senior to that held by Hispanic
Broadcasting. Accordingly, the holder of debt securities or junior subordinated
debt securities may be deemed to be effectively subordinated to those claims.
Stock and partnership interests of Hispanic Broadcasting's subsidiaries are
pledged to secure Hispanic Broadcasting's obligations under a credit agreement
dated February 14, 1997, among Hispanic Broadcasting, The Chase Manhattan Bank
and certain other lenders. The credit agreement requires Hispanic Broadcasting
to comply with various financial and operational covenants and restrictions,
including limitations on capital expenditures and the incurrence of additional
indebtedness, prohibitions on the payment of cash dividends and the redemption
or repurchase of Hispanic Broadcasting's capital stock and restrictions on the
use of borrowings.
GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS
Hispanic Broadcasting may offer shares of Class A common stock or preferred
stock, debt securities, junior subordinated debt securities, warrants, stock
purchase contracts, stock purchase units, or any combination of them either
individually or as units consisting of one or more securities under this
prospectus. Each HBC Trust may offer preferred securities under this prospectus.
The securities to be offered may involve a high degree of risk. Such risks
will be set forth in the prospectus supplement relating to the securities. In
addition, the risk factors, if any, relating to Hispanic Broadcasting's business
will be set forth in a prospectus supplement.
DESCRIPTION OF DEBT SECURITIES OTHER THAN
JUNIOR SUBORDINATED DEBT SECURITIES
The following description of Hispanic Broadcasting's debt securities other
than junior subordinated debt securities, which are discussed separately,
summarizes the general terms and provisions of its senior and subordinated debt
securities to which any prospectus supplement may relate. As used in this
section, the term "debt securities" refers to both the senior and the
subordinated debt securities of Hispanic Broadcasting. We will describe the
specific terms of Hispanic Broadcasting's debt securities and the extent, if
any, to which the general provisions summarized below may apply to any series of
its debt securities in the prospectus supplement relating to such series.
Hispanic Broadcasting may issue its senior debt securities from time to
time, in one or more series under a senior indenture, between Hispanic
Broadcasting and The Bank of New York, as senior trustee, or another senior
trustee named in a prospectus supplement. The form of senior indenture is filed
as an exhibit to the registration statement. Hispanic Broadcasting may issue its
subordinated debt securities from time to time, in one or more series under a
subordinated indenture, between Hispanic Broadcasting and The Bank of New York
or another subordinated trustee named in a prospectus supplement. The form of
subordinated indenture is filed as an exhibit to the registration statement.
Together the senior indenture and the subordinated indenture are called the
indentures, and together the senior trustee and the subordinated trustee are
called the debt trustees. None of the indentures will limit the amount of debt
securities that may be issued hereunder. The applicable indenture will provide
that debt securities may be issued up to an aggregate principal amount
authorized by Hispanic
6
<PAGE>
Broadcasting and may be payable in any currency or currency unit designated by
it or in amounts determined by reference to an index. The following summary of
certain provisions of the indentures is not complete and is subject to the
detailed provisions of the indentures. You should look at the applicable
indenture that is filed as an exhibit to this registration statement for
provisions that may be important to you. Wherever we refer to specific
provisions of the indentures or terms defined in the indentures, such provisions
and terms are incorporated by reference as a part of the statements made in this
prospectus and such statements are qualified in their entirety by such
references, including the definitions in the indentures of certain terms.
GENERAL
The senior debt securities will be unsecured and will rank equally with
Hispanic Broadcasting's other unsecured and unsubordinated debt, unless Hispanic
Broadcasting is required to secure the senior debt securities as described below
under "--Senior Debt Securities." Hispanic Broadcasting's obligations under any
subordinated debt securities will be subordinate in right of payment to all of
its senior indebtedness, and will be described in an accompanying prospectus
supplement. Hispanic Broadcasting will issue debt securities from time to time
and offer its debt securities on terms determined by market conditions at the
time of sale.
Hispanic Broadcasting may issue its debt securities in one or more series
with the same or various maturities, at par, at a premium, or at a discount. Any
debt securities bearing no interest or interest at a rate which at the time of
issuance is below market rates will be sold at a discount (which may be
substantial) from their stated principal amount. We will describe the federal
income tax consequences and other special considerations applicable to any
substantially discounted debt securities in the related prospectus supplement.
You should refer to the prospectus supplement for the following terms of the
debt securities offered hereby:
- the designation, aggregate principal amount and authorized denominations
of the debt securities;
- the percentage of the principal amount at which Hispanic Broadcasting will
issue the debt securities;
- the date or dates on which the debt securities will mature;
- the annual interest rate or rates of the debt securities, or the method of
determining the rate or rates;
- the date or dates on which any interest will be payable, the date or dates
on which payment of any interest will commence and the regular record
dates for such interest payment dates;
- the terms of any mandatory or optional redemption, including any
provisions for any sinking, purchase or other similar funds, or repayment
options;
- the currency, currencies or currency units for which the debt securities
may be purchased and in which the principal, any premium and any interest
may be payable;
- if the currency, currencies or currency units for which the debt
securities may be purchased or in which the principal, any premium and any
interest may be payable is at Hispanic Broadcasting's election or the
purchaser's election, the manner in which the election may be made;
- if the amount of payments on the debt securities is determined by an index
based on one or more currencies or currency units, changes in the price of
one or more securities or commodities, the manner in which the amounts may
be determined;
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- the extent to which any of the debt securities will be issuable in
temporary or permanent global form, and the manner in which any interest
payable on a temporary or permanent global security will be paid;
- the terms and conditions upon which the debt securities may be convertible
into or exchanged for common stock, preferred stock, or indebtedness or
other securities of any kind;
- information with respect to book-entry procedures, if any;
- a discussion of federal income tax, accounting and other special
considerations, procedures and limitations with respect to the debt
securities; and
- any other specific terms of the debt securities not inconsistent with the
applicable indenture.
If Hispanic Broadcasting sells any of the debt securities for one or more
foreign currencies or foreign currency units or if the principal of, premium, if
any, or interest on any series of debt securities will be payable in one or more
foreign currencies or foreign currency units, it will describe the restrictions,
elections, federal income tax consequences, specific terms and other information
with respect to the issue of debt securities and the currencies or currency
units in the related prospectus supplement.
Unless we specify otherwise in a prospectus supplement, the principal of,
premium on, and interest on the debt securities will be payable, and the debt
securities will be transferable, at the corporate trust office of the applicable
debt trustee in New York, New York. However, Hispanic Broadcasting may make
payment of interest at its option by check mailed on or before the payment date
to the address of the person entitled to the interest payment as it appears on
the registry books of Hispanic Broadcasting or its agent's.
Unless we specify otherwise in a prospectus supplement, Hispanic
Broadcasting will issue the debt securities only in fully registered form and in
denominations of $1,000 and any integral multiple of $1,000. No service charge
will be made for any transfer or exchange of any debt securities, but Hispanic
Broadcasting may, except in specific cases not involving any transfer, require
payment of a sufficient amount to cover any tax or other governmental charge
payable in connection with the transfer or exchange. Unless we specify otherwise
in the prospectus supplement, Hispanic Broadcasting will pay interest on
outstanding debt securities to holders of record on the date 15 days immediately
prior to the date the interest is to be paid.
Hispanic Broadcasting's rights and the rights of its creditors, including
holders of debt securities, to participate in any distribution of assets of any
of Hispanic Broadcasting's subsidiaries upon its liquidation or reorganization
or otherwise is subject to the prior claims of creditors of the subsidiary,
except to the extent that Hispanic Broadcasting's claims as a creditor of the
subsidiary may be recognized. Hispanic Broadcasting's operations are conducted
through its subsidiaries and, therefore, Hispanic Broadcasting is dependent upon
the earnings and cash flow of its subsidiaries to meet its obligations,
including obligations under the debt securities. The debt securities will be
effectively subordinated to all indebtedness of Hispanic Broadcasting's
subsidiaries.
GLOBAL SECURITIES
Hispanic Broadcasting may issue debt securities of a series in whole or in
part in the form of one or more global securities and will deposit them with or
on behalf of a depositary identified in the prospectus supplement relating to
that series. Hispanic Broadcasting may issue global securities only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual debt securities represented
thereby, a global security may not be transferred except as a whole by the
depositary for the global security to a nominee of the depositary
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or by a nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee of the depositary to a successor
or any nominee.
We will describe the specific terms of the depositary arrangement relating
to a series of debt securities in the prospectus supplement relating to that
series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global security, the depositary for the global
security or its nominee will credit on its book entry registration and transfer
system the principal amounts of the individual debt securities represented by
the global security to the accounts of persons that have accounts with the
depositary. The accounts will be designated by the dealers, underwriters or
agents with respect to the debt securities or by Hispanic Broadcasting if the
debt securities are offered and sold directly by it. Ownership of beneficial
interests in a global security will be limited to persons that have accounts
with the applicable depositary participants or persons that hold interests
through participants. Ownership of beneficial interests in the global security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by:
- the applicable depositary or its nominee, with respect to interests of
participants, and
- the records of participants, with respect to interests of persons other
than participants.
The laws of some states require that certain purchasers of securities take
physical delivery of the securities in definitive form. These limits and laws
may impair the ability to transfer beneficial interests in a global security.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or the nominee will be
considered the sole owner or holder of the debt securities represented by the
global security for all purposes under the applicable indenture. Except as
provided below, owners of beneficial interests in a global security will
- not be entitled to have any of the individual debt securities of the
series represented by the global security registered in their names;
- not receive or be entitled to receive physical delivery of any debt
securities of that series in definitive form; and
- not be considered the owners or holders thereof under the applicable
indenture governing the debt securities.
Payments of principal of, any premium on, and any interest on individual
debt securities represented by a global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee as the
registered owner of the global security representing the debt securities.
Neither Hispanic Broadcasting, the applicable debt trustee for the debt
securities, any paying agent, nor the security registrar for the debt securities
will have any responsibility or liability for the records relating to or
payments made on account of beneficial ownership interests of the global
security for the debt securities or for maintaining, supervising or reviewing
any records relating to the beneficial ownership interests.
Hispanic Broadcasting expects that the depositary for a series of debt
securities or its nominee, upon receipt of any payment of principal, premium or
interest in respect of a permanent global security representing any of the debt
securities, will immediately credit participants' accounts with payments in
amounts proportionate to their beneficial interests in the principal amount of
the global security for the debt securities as shown on the records of the
depositary or its nominee. Hispanic Broadcasting also expects that payments by
participants to owners of beneficial interests in the global security held
through the participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name." The payments will be the
responsibility of those participants.
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If the depositary for a series of debt securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by Hispanic Broadcasting within 90 days, Hispanic Broadcasting will
issue individual debt securities of that series in exchange for the global
security representing that series of debt securities. In addition, Hispanic
Broadcasting may at any time and in its sole discretion, subject to any
limitations described in the prospectus supplement relating to the debt
securities, determine not to have any debt securities of a series represented by
one or more global securities. In that event, Hispanic Broadcasting will issue
individual debt securities of that series in exchange for the global security or
Securities representing that series of debt securities. Further, if Hispanic
Broadcasting so specifies with respect to the debt securities of a series, an
owner of a beneficial interest in a global security representing debt securities
of that series may, on terms acceptable to Hispanic Broadcasting, the applicable
debt trustee and the depositary for such global security, receive individual
debt securities of that series in exchange for the beneficial interests, subject
to any limitations described in the prospectus supplement relating to the debt
securities. In any such instance, an owner of a beneficial interest in a global
security will be entitled to physical delivery of individual debt securities of
the series represented by the global security equal in principal amount to the
beneficial interest and to have the debt securities registered in its name.
Individual debt securities of the series so issued will be issued in
denominations, unless otherwise specified by Hispanic Broadcasting, of $1,000
and integral multiples of $1,000.
CONSOLIDATION, MERGER OR SALE
Each indenture prohibits Hispanic Broadcasting's consolidation with or
merger into any other corporation or the transfer Hispanic Broadcasting's
properties and assets to any person, unless:
- the successor corporation is organized and existing under the laws of the
United States, any State thereof or the District of Columbia, and
expressly assumes by a supplemental indenture the punctual payment of the
principal of, premium on and interest on, all the outstanding debt
securities and the performance of every covenant in the applicable
indenture to be performed or observed on Hispanic Broadcasting's part;
- immediately after giving effect to the transaction, no event of default
has happened and is continuing; and
- Hispanic Broadcasting has delivered to the applicable debt trustee an
officers' certificate and an opinion of counsel, each stating that the
consolidation, merger, conveyance or transfer and the supplemental
indenture comply with the foregoing provisions relating to the
transaction.
In case of any consolidation, merger, conveyance or transfer, the successor
corporation will succeed to and be substituted for Hispanic Broadcasting as
obligor on the debt securities, with the same effect as if it had been named as
Hispanic Broadcasting in the applicable indenture. Unless we specify otherwise
in a prospectus supplement, the indentures and the debt securities do not
contain any covenants or other provisions designed to protect holders of debt
securities in the event of a highly leveraged transaction involving Hispanic
Broadcasting or any of its subsidiaries.
EVENTS OF DEFAULT; WAIVER AND NOTICE OF DEFAULT; DEBT SECURITIES IN FOREIGN
CURRENCIES
An event of default when used in an indenture will mean any of the following
as to any series of debt securities:
- default for 30 days in payment of any interest, or, in the case of the
subordinated indenture, for a period of 90 days;
- default in payment of principal of or any premium at maturity;
- default in payment of any sinking or purchase fund or similar obligation;
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- default by Hispanic Broadcasting in the performance of any other covenant
or warranty contained in the applicable indenture for the benefit of that
series which has not been remedied for a period of 90 days after notice is
given; or
- events of Hispanic Broadcasting's bankruptcy, insolvency and
reorganization.
A default under Hispanic Broadcasting's other indebtedness will not be a
default under the indentures and a default under one series of debt securities
will not necessarily be a default under another series.
Each indenture provides that if an event of default described in the first
four bullet points above, if the event of default under the fourth bullet point
is with respect to less than all series of debt securities then outstanding, has
occurred and is continuing with respect to any series, either the applicable
debt trustee or the holders of not less than 25% in aggregate principal amount
of the debt securities of the series then outstanding, each series acting as a
separate class, may declare the principal or, in the case of original issue
discount securities, the portion specified in the terms thereof, of all
outstanding debt securities of the series and the accrued interest to be due and
payable immediately. Each indenture further provides that if an event of default
described in the fourth or fifth bullet points above, if the event of default
under the fourth bullet point is with respect to all series of debt securities
then outstanding, has occurred and is continuing, either the applicable debt
trustee or the holders of at least 25% in aggregate principal amount of all debt
securities then outstanding, treated as one class, may declare the principal or,
in the case of original issue discount securities, the portion specified in the
terms thereof, of all debt securities then outstanding and the accrued interest
to be due and payable immediately. However, upon certain conditions the
declarations may be annulled and past defaults, except for defaults in the
payment of principal of, premium on, or interest on, the debt securities and in
compliance with certain covenants, may be waived by the holders of a majority in
aggregate principal amount of the debt securities of the series then
outstanding.
Under each indenture the applicable debt trustee must give notice to the
holders of each series of debt securities of all uncured defaults known to it
with respect to that series within 90 days after a default occurs. The term
"default" includes the events specified above without notice or grace periods.
However, in the case of any default of the type described in the fourth bullet
point above, no notice may be given until at least 90 days after the occurrence
of the event. The debt trustee will be protected in withholding notice if it in
good faith determines that the withholding of notice is in the interests of the
holders of the debt securities, except in the case of default in the payment of
principal of, premium on, or interest on, any of the debt securities, or default
in the payment of any sinking or purchase fund installment or analogous
obligations.
No holder of any debt securities of any series may institute any action
under either indenture for debt securities unless:
- the holder has given the debt trustee written notice of a continuing event
of default with respect to that series;
- the holders of not less than 25% in aggregate principal amount of the debt
securities of the series then outstanding have requested the debt trustee
to institute proceedings in respect of the event of default;
- the holder or holders have offered the debt trustee reasonable indemnity
as the debt trustee may require;
- the debt trustee has failed to institute an action for 60 days; and
- no inconsistent direction has been given to the debt trustee during the
60-day period by the holders of a majority in aggregate principal amount
of debt securities of the series then outstanding.
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The holders of a majority in aggregate principal amount of the debt
securities of any series affected and then outstanding will have the right,
subject to limitations, to direct the time, method and place of conducting any
proceeding for any remedy available to the applicable debt trustee or exercising
any trust or power conferred on the debt trustee with respect to a series of
debt securities. Each indenture provides that if an event of default occurs and
is continuing, the debt trustee will be required to use the degree of care of a
prudent person in the conduct of that person's own affairs in exercising its
rights and powers under the indenture. Each indenture further provides that the
debt trustee will not be required to expend or risk its own funds in the
performance of any of its duties under the indenture unless it has reasonable
grounds for believing that repayment of the funds or adequate indemnity against
the risk or liability is reasonably assured to it.
Hispanic Broadcasting must furnish to the debt trustees within 120 days
after the end of each fiscal year a statement signed by one of its officers to
the effect that a review of its activities during the year and of its
performance under the applicable indenture and the terms of the debt securities
has been made, and, to the best of the knowledge of the signatories based on the
review, Hispanic Broadcasting have complied with all conditions and covenants of
the indenture through the year or, if Hispanic Broadcasting is in default,
specifying the default.
To determine whether the holders of the requisite principal amount of debt
securities have taken action as described above when the debt securities are
denominated in a foreign currency, the principal amount of the debt securities
will be deemed to be that amount of United States dollars that could be obtained
for the principal amount based on the applicable spot rate of exchange as of the
date the action is taken as evidenced to the debt trustee as provided in the
indenture.
To determine whether the holders of the requisite principal amount of debt
securities have taken action as described above when the debt securities are
original issue discount securities, the principal amount of the debt securities
will be deemed to be the portion of the principal amount that would be due and
payable at the time the action is taken upon a declaration of acceleration of
maturity.
MODIFICATION OF THE INDENTURES
The indentures provide that Hispanic Broadcasting and the applicable debt
trustee may, without the consent of any holders of debt securities, enter into
supplemental indentures for the purposes, among other things, of adding to
Hispanic Broadcasting's covenants, adding additional events of default,
establishing the form or terms of any series of debt securities or curing
ambiguities or inconsistencies in the indenture or making other provisions.
With specific exceptions, the applicable indenture or the rights of the
holders of the debt securities may be modified by Hispanic Broadcasting and the
applicable debt trustee with the consent of the holders of a majority in
aggregate principal amount of the debt securities of each series affected by the
modification then outstanding, but no modification may be made without the
consent of the holder of each outstanding debt security affected which would:
- change the maturity of any payment of principal of, or any premium on, or
any installment of interest on any debt security;
- reduce the principal amount of or the interest or any premium on any debt
security;
- change the method of computing the amount of principal of or interest on
any date;
- change any place of payment where, or the currency in which, any debt
security or any premium or interest is payable;
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- impair the right to sue for the enforcement of any payment on or after the
maturity thereof (or, in the case of redemption or repayment, on or after
the redemption date or the repayment date);
- reduce the percentage in principal amount of the outstanding debt
securities of any series where the consent of the holders is required for
any modification, or the consent of the holders is required for any waiver
of compliance with provisions of the applicable indenture or specific
defaults and their consequences provided for in the indenture; or
- modify any of the provisions of specific sections of the applicable
indenture, including the provisions summarized in this section, except to
increase any percentage or to provide that other provisions of the
indenture cannot be modified or waived without the consent of the holder
of each outstanding debt security affected thereby.
SATISFACTION AND DISCHARGE OF THE INDENTURES; DEFEASANCE
The indentures will generally cease to be of any further effect with respect
to a series of debt securities if Hispanic Broadcasting delivers all debt
securities of that series (with certain limited exceptions) for cancellation to
the applicable debt trustee or all debt securities of that series not previously
delivered for cancellation to the applicable debt trustee have become due and
payable or will become due and payable or called for redemption within one year,
and Hispanic Broadcasting has deposited with the applicable debt trustee as
trust funds the entire amount sufficient to pay at maturity or upon redemption
all the debt securities, no default with respect to the debt securities has
occurred and is continuing on the date of the deposit, and the deposit does not
result in a breach or violation of, or default under the applicable indenture or
any other agreement or instrument to which Hispanic Broadcasting is a party.
Hispanic Broadcasting has a "legal defeasance option" under which it may
terminate, with respect to the debt securities of a particular series, all of
its obligations under the debt securities and the applicable indenture. In
addition, Hispanic Broadcasting has a "covenant defeasance option" under which
it may terminate, with respect to the debt securities of a particular series,
Hispanic Broadcasting's obligations with respect to the debt securities under
specified covenants contained in the applicable indenture. If Hispanic
Broadcasting exercises its legal defeasance option with respect to a series of
debt securities, payment of the debt securities may not be accelerated because
of an event of default. If Hispanic Broadcasting exercises its covenant
defeasance option with respect to a series of debt securities, payment of the
debt securities may not be accelerated because of an event of default related to
the specified covenants.
Hispanic Broadcasting may exercise its legal defeasance option or its
covenant defeasance option with respect to the debt securities of a series only
if:
- Hispanic Broadcasting deposits in trust with the applicable debt trustee
cash or debt obligations of the United States of America or its agencies
or instrumentalities for the payment of principal, premium and interest
with respect to the debt securities to maturity or redemption;
- Hispanic Broadcasting delivers to the applicable debt trustee a
certificate from a nationally recognized firm of independent public
accountants expressing their opinion that the payments of principal and
interest when due will provide cash sufficient to pay the principal,
premium, and interest when due with respect to all the debt securities of
that series to maturity or redemption;
- 91 days pass after the deposit is made and during the 91-day period no
default described in the fifth bullet point under "--Events of Default,
Waiver and Notice Of Default; Debt Securities in Foreign Currencies" above
with respect to Hispanic Broadcasting occurs that is continuing at the end
of the period,
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- no default has occurred and is continuing on the date of the deposit;
- the deposit does not constitute a default under any other agreement
binding on Hispanic Broadcasting;
- Hispanic Broadcasting delivers to the applicable debt trustee an opinion
of counsel to the effect that the trust resulting from the deposit does
not constitute a regulated investment company under the Investment Company
Act of 1940;
- Hispanic Broadcasting has delivered to the applicable debt trustee an
opinion of counsel addressing specific federal income tax matters relating
to the defeasance; and
- Hispanic Broadcasting delivers to the applicable debt trustee an officers'
certificate and an opinion of counsel stating that all conditions to the
defeasance and discharge of the debt securities of that series have been
complied with.
The applicable debt trustee will hold in trust cash or debt obligations of
the United States of America or its agencies or instrumentalities deposited with
it as described above and will apply the deposited cash and the proceeds from
deposited debt obligations of the United States of America or its agencies or
instrumentalities to the payment of principal, premium, and interest with
respect to the debt securities of the defeased series.
CONCERNING THE DEBT TRUSTEES
Hispanic Broadcasting will identify the debt trustee for the senior debt
securities and the debt trustee for the subordinated debt securities in the
relevant prospectus supplement. In specific instances, Hispanic Broadcasting or
the holders of a majority of the then outstanding principal amount of the debt
securities issued under an indenture may remove the debt trustee and appoint a
successor debt trustee. The debt trustee may become the owner or pledgee of any
of the debt securities with the same rights, subject to conflict of interest
restrictions, it would have if it were not the debt trustee. The debt trustee
and any successor trustee must be a corporation organized and doing business as
a commercial bank or trust company under the laws of the United States or of any
state thereof, authorized under those laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
examination by federal or state authority. Subject to applicable law relating to
conflicts of interest, the debt trustee may also serve as trustee under other
indentures relating to debt securities issued by Hispanic Broadcasting or its
affiliated companies and may engage in commercial transactions with Hispanic
Broadcasting and its affiliated companies. The initial debt trustee under each
indenture is The Bank of New York.
SENIOR DEBT SECURITIES
In addition to the provisions previously described in this prospectus and
applicable to all debt securities, the following description of Hispanic
Broadcasting's senior debt securities summarizes the general terms and
provisions of its senior debt securities to which any prospectus supplement may
relate. Hispanic Broadcasting will describe the specific terms of the senior
debt securities offered by any prospectus supplement and the extent, if any, to
which the general provisions summarized below may apply to any series of its
senior debt securities in the prospectus supplement relating to that series.
RANKING OF SENIOR DEBT SECURITIES
Unless we specify otherwise in a prospectus supplement for a particular
series of debt securities, all series of senior debt securities will be Hispanic
Broadcasting's senior indebtedness and will be direct, unsecured obligations of
Hispanic Broadcasting ranking equally with all of Hispanic Broadcasting's other
unsecured and unsubordinated indebtedness. Because Hispanic Broadcasting is a
holding company, the debt securities will be effectively subordinated to all
existing and future liabilities, including indebtedness, of Hispanic
Broadcasting's subsidiaries. See "Holding Company Structure."
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SUBORDINATED DEBT SECURITIES
In addition to the provisions previously described in this prospectus and
applicable to all debt securities, the following description of Hispanic
Broadcasting's subordinated debt securities summarizes the general terms and
provisions of its subordinated debt securities to which any prospectus
supplement may relate. We will describe the specific terms of Hispanic
Broadcasting's subordinated debt securities offered by any prospectus supplement
and the extent, if any, to which the general provisions summarized below may
apply to any series of subordinated debt securities in the prospectus supplement
relating to that series.
RANKING OF SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be subordinated in right of payment to
Hispanic Broadcasting's other indebtedness to the extent set forth in the
applicable prospectus supplement.
The payment of the principal of, premium, if any, and interest on the
subordinated debt securities will be subordinated in right of payment to the
prior payment in full of all of Hispanic Broadcasting's senior indebtedness and
equally with its trade creditors. Hispanic Broadcasting may not make payment of
principal of, premium, if any, or interest on the subordinated debt securities
and may not acquire or make payment on account of any sinking fund for, the
subordinated debt securities unless full payment of amounts then due for
principal, premium, if any, and interest then due on all senior indebtedness by
reason of the maturity thereof has been made or duly provided for in cash or in
a manner satisfactory to the holders of the senior indebtedness. In addition,
the subordinated indenture provides that if a default has occurred giving the
holders of the senior indebtedness the right to accelerate the maturity thereof,
or an event has occurred which, with the giving of notice, or lapse of time, or
both, would constitute an event of default, then unless and until that event has
been cured or waived or has ceased to exist, no payment of principal, premium,
if any, or interest on the subordinated debt securities and no acquisition of,
or payment on account of a sinking fund for, the subordinated debt securities
may be made. Hispanic Broadcasting will give prompt written notice to the
subordinated trustee of any default under any senior indebtedness or under any
agreement pursuant to which senior indebtedness may have been issued. The
subordinated indenture provisions described in this paragraph, however, do not
prevent Hispanic Broadcasting from making a sinking fund payment with
subordinated debt securities acquired prior to the maturity of senior
indebtedness or, in the case of default, prior to the default and notice
thereof. Upon any distribution of assets in connection with Hispanic
Broadcasting's dissolution, liquidation or reorganization, all senior
indebtedness must be paid in full before the holders of the subordinated debt
securities are entitled to any payments whatsoever. As a result of these
subordination provisions, in the event of Hispanic Broadcasting's insolvency,
holders of the subordinated debt securities may recover ratably less than
Hispanic Broadcasting's senior creditors.
For purposes of the description of the subordinated debt securities, the
term "senior indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of the
subordinated indenture or thereafter incurred or created:
- Hispanic Broadcasting's indebtedness for money borrowed by it, including
purchase money obligations with an original maturity in excess of one
year) or evidenced by securities, other than the subordinated debt
securities or junior subordinated debt securities, notes, bankers'
acceptances or other corporate debt securities or similar instruments
issued by Hispanic Broadcasting;
- obligations with respect to letters of credit;
- Hispanic Broadcasting's indebtedness constituting a guarantee of
indebtedness of others of the type referred to in the preceding two bullet
points; or
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- renewals, extensions or refundings of any of the indebtedness referred to
in the preceding three bullet points unless, in the case of any particular
indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same, or pursuant
to which the same is outstanding, the indebtedness or the renewal,
extension or refunding thereof is not superior in right of payment to the
subordinated debt securities.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The following description of Hispanic Broadcasting's junior subordinated
debt securities summarizes the general terms and provisions of its junior
subordinated debt securities to which any prospectus supplement may relate.
Hispanic Broadcasting will describe the specific terms of the junior
subordinated debt securities and the extent, if any, to which the general
provisions summarized below may apply to any series of its junior subordinated
debt securities in the prospectus supplement relating to that series.
Hispanic Broadcasting may issue its junior subordinated debt securities from
time to time, in one or more series under a junior subordinated indenture,
between Hispanic Broadcasting and The Bank of New York, as junior subordinated
trustee, or another junior subordinated trustee named in a prospectus
supplement. The form of junior subordinated indenture is filed as an exhibit to
the registration statement. The following summary of certain provisions of the
junior subordinated indenture is not complete and is subject to the detailed
provisions of the junior subordinated indenture. You should look at the junior
subordinated indenture that is filed as an exhibit to this registration
statement for provisions that may be important to you. Wherever we refer to
specific provisions of the junior subordinated indenture or terms defined in the
junior subordinated indenture, such provisions and terms are incorporated by
reference as a part of the statements made in this prospectus and such
statements are qualified in their entirety by such references, including the
definitions in the junior subordinated indenture of certain terms.
GENERAL
The junior subordinated debt securities will be unsecured, junior
subordinated obligations of Hispanic Broadcasting. The junior subordinated
indenture does not limit the amount of additional indebtedness Hispanic
Broadcasting or any of its subsidiaries may incur. Since Hispanic Broadcasting
is a holding company, Hispanic Broadcasting's rights and the rights of its
creditors, including the holders of junior subordinated debt securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that Hispanic Broadcasting may itself be a
creditor with recognized claims against the subsidiary.
The junior subordinated indenture does not limit the aggregate principal
amount of indebtedness which may be issued thereunder and provides that junior
subordinated debt securities may be issued thereunder from time to time in one
or more series. The junior subordinated debt securities are issuable in one or
more series pursuant to a board resolution or an indenture supplemental to the
junior subordinated indenture. Hispanic Broadcasting will issue junior
subordinated debt securities from time to time and offer its junior subordinated
debt securities on terms determined by market conditions at the time of sale.
In the event junior subordinated debt securities are issued to an HBC Trust
or a trustee of an HBC Trust in connection with the issuance of preferred
securities by that HBC Trust, the junior subordinated debt securities
subsequently may be distributed pro rata to the holders of the preferred
securities in connection with the dissolution of the HBC Trust upon the
occurrence of the events described in the applicable prospectus supplement. Only
one series of junior subordinated debt securities will be issued to an HBC Trust
or a trustee of an HBC Trust in connection with the issuance of preferred
securities by that HBC Trust.
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You should refer to the applicable prospectus supplement for the following
terms of the junior subordinated debt securities offered hereby:
- the designation, aggregate principal amount and authorized denominations
of the junior subordinated debt securities;
- any limit on the aggregate principal amount of the junior subordinated
debt securities;
- the date or dates on which the junior subordinated debt securities will
mature;
- the annual interest rate or rates of the junior subordinated debt
securities, or the method of determining the rate or rates;
- the date or dates on which any interest will be payable, the date or dates
on which payment of any interest will commence and the regular record
dates for such interest payment dates;
- the terms of any mandatory or optional redemption, including any
provisions for any sinking, purchase or other similar funds, or repayment
options;
- the currency, currencies or currency units for which the junior
subordinated debt securities may be purchased and the currency, currencies
or currency units in which the principal, any premium and any interest may
be payable;
- if the currency, currencies or currency units for which the junior
subordinated debt securities may be purchased or in which the principal,
any premium and any interest may be payable is at Hispanic Broadcasting's
election or the purchaser's election, the manner in which the election may
be made;
- if the amount of payments on the junior subordinated debt securities is
determined by an index based on one or more currencies or currency units,
changes in the price of one or more securities or changes in the price of
one or more commodities, the manner in which the amounts may be
determined;
- the extent to which any of the junior subordinated debt securities will be
issuable in temporary or permanent global form, or the manner in which any
interest payable on a temporary or permanent global security will be paid;
- the terms and conditions upon which the junior subordinated debt
securities may be convertible into or exchanged for common stock,
preferred stock, or indebtedness or other securities of any kind;
- information with respect to book-entry procedures, if any;
- a discussion of the federal income tax, accounting and other special
considerations, procedures and limitations with respect to the junior
subordinated debt securities; and
- any other specific terms of the junior subordinated debt securities not
inconsistent with the junior subordinated indenture.
If Hispanic Broadcasting sells any of the junior subordinated debt
securities for one or more foreign currencies or foreign currency units or if
the principal of, premium, if any, or interest on any series of junior
subordinated debt securities will be payable in one or more foreign currencies
or foreign currency units, we will describe the restrictions, elections, federal
income tax consequences, specific terms and other information with respect to
the issue of junior subordinated debt securities and the currencies or currency
units in the applicable prospectus supplement.
Unless we specify otherwise in a prospectus supplement, the principal of,
premium on, and interest on the junior subordinated debt securities will be
payable, and the junior subordinated debt securities will be transferable, at
the corporate trust office of the junior subordinated indenture trustee in New
York, New York. However, Hispanic Broadcasting may make payment of interest at
its option by check
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mailed on or before the payment date to the address of the person entitled to
the interest payment as it appears on the registry books of Hispanic
Broadcasting or its agents.
Unless we specify otherwise in a prospectus supplement, Hispanic
Broadcasting will issue the junior subordinated debt securities only in fully
registered form and in denominations of $1,000 and any integral multiple of
$1,000. No service charge will be made for any transfer or exchange of any
junior subordinated debt securities, but Hispanic Broadcasting may, except in
specific cases not involving any transfer, require payment of a sufficient
amount to cover any tax or other governmental charge payable in connection with
the transfer or exchange. Unless we specify otherwise in the prospectus
supplement, Hispanic Broadcasting will pay interest on outstanding junior
subordinated debt securities to holders of record on the date 15 days
immediately prior to the date the interest is to be paid.
GLOBAL SECURITIES
Hispanic Broadcasting may issue junior subordinated debt securities of a
series in whole or in part in the form of one or more global securities that
will be deposited with or on behalf of a depositary identified in the prospectus
supplement relating to that series. Hispanic Broadcasting may issue global
securities only in fully registered form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for the individual
junior subordinated debt securities represented thereby, a global security may
not be transferred except as a whole by the depositary for the global security
to a nominee of the depositary or by a nominee of the depositary to the
depositary or another nominee of the depositary or by the depositary or any
nominee of the depositary to a successor or any nominee.
We will describe the specific terms of the depositary arrangement relating
to a series of junior subordinated debt securities in the prospectus supplement
relating to that series. We anticipate that the following provisions will
generally apply to depositary arrangements.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
The junior subordinated indenture prohibits Hispanic Broadcasting's
consolidation with or merger into any other corporation or the transfer of its
properties and assets to any person, unless:
- the successor corporation is organized and existing under the laws of the
United States, any State thereof or the District of Columbia, and
expressly assumes by a supplemental indenture the punctual payment of the
principal of, premium on and interest on, all the outstanding junior
subordinated debt securities and the performance of every covenant in the
junior subordinated indenture to be performed or observed on Hispanic
Broadcasting's part;
- immediately after giving effect to the transaction, no event of default
has happened and is continuing; and
- Hispanic Broadcasting has delivered to the junior subordinated indenture
trustee an officers' certificate and an opinion of counsel, each stating
that the consolidation, merger, conveyance or transfer and that
supplemental indenture comply with the foregoing provisions relating to
the transaction.
In case of any consolidation, merger, conveyance or transfer, the successor
corporation will succeed to and be substituted for Hispanic Broadcasting as
obligor on the junior subordinated debt securities, with the same effect as if
it had been named as Hispanic Broadcasting in the junior subordinated indenture.
The junior subordinated indenture and the junior subordinated debt securities do
not contain any covenants or other provisions designed to protect holders of
junior subordinated debt securities in the event of a highly leveraged
transaction involving Hispanic Broadcasting or any of its subsidiaries.
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EVENTS OF DEFAULT; WAIVER AND NOTICE OF DEFAULT; JUNIOR SUBORDINATED DEBT
SECURITIES IN FOREIGN CURRENCIES
An event of default when used in an junior subordinated indenture will mean
any of the following as to any series of junior subordinated debt securities:
- default for 90 days in payment of any interest on the junior subordinated
debt securities;
- default in payment of principal or any premium at maturity;
- default in payment of any sinking or purchase fund or similar obligation;
- default by Hispanic Broadcasting in the performance of any other covenant
or warranty contained in the junior subordinated indenture for the benefit
of that series which has not been remedied for a period of 90 days after
notice is given; or
- events of Hispanic Broadcasting's bankruptcy, insolvency and
reorganization.
A default under Hispanic Broadcasting's other indebtedness will not be a
default under the junior subordinated indenture and a default under one series
of junior subordinated debt securities will not necessarily be a default under
another series.
The junior subordinated indenture provides that if an event of default
described in the first four bullet points above, if the event of default under
the fourth bullet point is with respect to less than all series of junior
subordinated debt securities then outstanding, has occurred and is continuing
with respect to any series, either the junior subordinated indenture trustee or
the holders of not less than 25% in aggregate principal amount of the junior
subordinated debt securities of such series then outstanding, each series acting
as a separate class, may declare the principal or, in the case of original issue
discount securities, the portion specified in the terms thereof, of all
outstanding junior subordinated debt securities of such series and the accrued
interest to be due and payable immediately. The junior subordinated indenture
further provides that if an event of default described in the fourth or fifth
bullet points above, if the event of default under the fourth bullet point is
with respect to all series of junior subordinated debt securities then
outstanding, has occurred and is continuing, either the junior subordinated debt
trustee or the holders of at least 25% in aggregate principal amount of all
junior subordinated debt securities then outstanding, treated as one class, may
declare the principal or, in the case of original issue discount securities, the
portion specified in the terms thereof, of all junior subordinated debt
securities then outstanding and the accrued interest to be due and payable
immediately. However, upon certain conditions the declarations may be annulled
and past defaults, except for defaults in the payment of principal of, premium
on, or interest on, the junior subordinated debt securities and in compliance
with certain covenants, may be waived by the holders of a majority in aggregate
principal amount of the junior subordinated debt securities of that series then
outstanding, subject to the consent of the holders of the preferred securities
and the common securities of any HBC Trust as required by its declaration of
trust in the event that the junior subordinated debt securities are held as
assets of such HBC Trust prior to a security exchange.
When used with respect to the junior subordinated debt securities which are
held as trust assets of an HBC Trust pursuant to the declaration of trust of the
HBC Trust, the term "security exchange" means the distribution of the junior
subordinated debt securities held by the HBC Trust in exchange for the preferred
securities and the common securities of the HBC Trust in dissolution of the HBC
Trust pursuant to the declaration of trust of the HBC Trust.
Under the junior subordinated indenture the junior subordinated indenture
trustee must give notice to the holders of each series of junior subordinated
debt securities of all uncured defaults known to it with respect to that series
within 90 days after a default occurs. The term "default" includes the events
specified above without notice or grace periods. However, in the case of any
default of the type described in the fourth bullet point above, no notice may be
given until at least 90 days after the
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occurrence of the event. The junior subordinated debt trustee will be protected
in withholding notice if it in good faith determines that the withholding of
notice is in the interests of the holders of the junior subordinated debt
securities, except in the case of default in the payment of principal of,
premium on, or interest on, any of the junior subordinated debt securities, or
default in the payment of any sinking or purchase fund installment or analogous
obligations.
No holder of any junior subordinated debt securities of any series may
institute any action under either indenture unless:
- the holder has given the junior subordinated indenture trustee written
notice of a continuing event of default with respect to that series;
- the holders of not less than 25% in aggregate principal amount of the
junior subordinated debt securities of that series then outstanding have
requested the junior subordinated indenture trustee to institute
proceedings in respect of the event of default;
- the holder or holders have offered the junior subordinated indenture
trustee reasonable indemnity as the trustee may require;
- the junior subordinated indenture trustee has failed to institute an
action for 60 days after the notice, request and indemnity have been made
as described above; and
- no inconsistent direction has been given to the junior subordinated
indenture trustee during the 60-day period by the holders of a majority in
aggregate principal amount of junior subordinated debt securities of the
series then outstanding, subject to the consent of the holders of the
preferred securities and the common securities of any HBC Trust as
required by its declaration of trust in the event that junior subordinated
debt securities are held as assets of the HBC Trust prior to a security
exchange.
The holders of a majority in aggregate principal amount of the junior
subordinated debt securities of any series affected and then outstanding,
subject to the consent of the holders of the preferred securities and the common
securities of any HBC Trust as required by its declaration of trust in the event
that the junior subordinated debt securities are held as assets of the HBC Trust
prior to a security exchange, will have the right, subject to limitations, to
direct the time, method and place of conducting any proceeding for any remedy
available to the junior subordinated indenture trustee or exercising any trust
or power conferred on the junior subordinated indenture trustee with respect to
the series of junior subordinated debt securities. The junior subordinated
indenture provides that if an event of default occurs and is continuing, the
junior subordinated indenture trustee will be required to use the degree of care
of a prudent person in the conduct of the person's own affairs in exercising its
rights and powers under the indenture. The junior subordinated indenture further
provides that the junior subordinated indenture trustee will not be required to
expend or risk its own funds in the performance of any of its duties under the
indenture unless it has reasonable grounds for believing that repayment of the
funds or adequate indemnity against the risk or liability is reasonably assured
to it.
Hispanic Broadcasting must furnish to the junior subordinated indenture
trustees within 120 days after the end of each fiscal year a statement signed by
one of its officers to the effect that a review of its activities during the
year and of its performance under the junior subordinated indenture and the
terms of the junior subordinated debt securities has been made, and, to the best
of the knowledge of the signatories based on the review, Hispanic Broadcasting
has complied with all conditions and covenants of the indenture through the year
or, if Hispanic Broadcasting is in default, specifying the default.
If any junior subordinated debt securities are denominated in a currency
other than that of the United States, then for the purposes of determining
whether the holders of the requisite principal amount of junior subordinated
debt securities have taken any action as described in this prospectus, the
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principal amount of the junior subordinated debt securities will be deemed to be
that amount of United States dollars that could be obtained for the principal
amount on the basis of the spot rate of exchange into United States dollars for
the currency in which the junior subordinated debt securities are denominated as
of the date the taking of the action by the holders of the requisite principal
amount is evidenced to the junior subordinated indenture trustee as provided in
the junior subordinated indenture.
If any junior subordinated debt securities are original issue discount
securities, then for the purposes of determining whether the holders of the
requisite principal amount of junior subordinated debt securities have taken any
action described in this prospectus, the principal amount of the junior
subordinated debt securities will be deemed to be the portion of the principal
amount that would be due and payable at the time of the taking of the action
upon a declaration of acceleration of maturity thereof.
MODIFICATION OF THE JUNIOR SUBORDINATED INDENTURE
The junior subordinated indenture provides that Hispanic Broadcasting and
the junior subordinated indenture trustee may, without the consent of any
holders of junior subordinated debt securities, enter into supplemental
indentures for the purposes, among other things, of adding to Hispanic
Broadcasting's covenants, adding additional events of default, establishing the
form or terms of any series of junior subordinated debt securities or curing
ambiguities or inconsistencies in the indenture or making other provisions.
With specific exceptions, the junior subordinated indenture or the rights of
the holders of the junior subordinated debt securities may be modified by
Hispanic Broadcasting and the junior subordinated indenture trustee with the
consent of the holders of a majority in aggregate principal amount of the junior
subordinated debt securities of each series affected by the modification then
outstanding, subject to the consent of the holders of the preferred securities
and the common securities of any HBC Trust as required by its declaration of
trust in the event that the junior subordinated debt securities are held as
assets of the HBC Trust prior to a security exchange, but no modification may be
made without the consent of the holder of each outstanding junior subordinated
debt security affected, subject to the consent of the holders of the preferred
securities and the common securities of any HBC Trust as required by its
declaration of trust in the event that the junior subordinated debt securities
are held as assets of the HBC Trust prior to a security exchange, which would:
- change the maturity of any payment of principal of, or any premium on, or
any installment of interest on any junior subordinated debt security;
- reduce the principal amount of or the interest or any premium on any
junior subordinated debt security;
- change the method of computing the amount of principal of or interest on
any date;
- change any place of payment where, or the currency in which, any junior
subordinated debt security or any premium or interest is payable;
- impair the right to sue for the enforcement of any payment on or after the
maturity thereof or, in the case of redemption or repayment, on or after
the redemption date or the repayment date;
- reduce the percentage in principal amount of the outstanding junior
subordinated debt securities of any series where the consent of the
holders is required for any modification, or the consent of the holders is
required for any waiver of compliance with the provisions of the junior
subordinated indenture or specific defaults and their consequences
provided for in the indenture; or
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- modify any of the provisions of specific sections of the junior
subordinated indenture, including the provisions summarized in this
section, except to increase any such percentage or to provide that other
provisions of the indenture cannot be modified or waived without the
consent of the holder of each outstanding debt security affected thereby.
SATISFACTION AND DISCHARGE OF THE JUNIOR SUBORDINATED INDENTURE; DEFEASANCE
The junior subordinated indenture will generally cease to be of any further
effect with respect to a series of junior subordinated debt securities if
Hispanic Broadcasting delivers all junior subordinated debt securities of that
series, with limited exceptions, for cancellation to the junior subordinated
indenture trustee or all junior subordinated debt securities of that series not
previously delivered for cancellation to the junior subordinated indenture
trustee have become due and payable or will become due and payable or called for
redemption within one year, and Hispanic Broadcasting has deposited with the
junior subordinated indenture trustee as trust funds the entire amount
sufficient to pay at maturity or upon redemption all the junior subordinated
debt securities, no default with respect to the junior subordinated debt
securities has occurred and is continuing on the date of the deposit, and the
deposit does not result in a breach or violation of, or default under the junior
subordinated indenture or any other agreement or instrument to which Hispanic
Broadcasting is a party.
Hispanic Broadcasting has a "legal defeasance option" under which it may
terminate, with respect to the junior subordinated debt securities of a
particular series, all of its obligations under the junior subordinated debt
securities and the junior subordinated indenture. In addition, Hispanic
Broadcasting has a "covenant defeasance option" under which it may terminate,
with respect to the junior subordinated debt securities of a particular series,
its obligations with respect to the junior subordinated debt securities under
specified covenants contained in the junior subordinated indenture. If Hispanic
Broadcasting exercises its legal defeasance option with respect to a series of
junior subordinated debt securities, payment of the junior subordinated debt
securities may not be accelerated because of an event of default. If Hispanic
Broadcasting exercises its covenant defeasance option with respect to a series
of junior subordinated debt securities, payment of the junior subordinated debt
securities may not be accelerated because of an event of default related to the
specified covenants.
Hispanic Broadcasting may exercise its legal defeasance option or its
covenant defeasance option with respect to the junior subordinated debt
securities of a series only if:
- Hispanic Broadcasting deposits in trust with the junior subordinated
indenture trustee cash or debt obligations of the United States of America
or its agencies or instrumentalities (as defined in the junior
subordinated indenture) for the payment of principal, premium and interest
with respect to the junior subordinated debt securities to maturity or
redemption;
- Hispanic Broadcasting delivers to the junior subordinated indenture
trustee a certificate from a nationally recognized firm of independent
public accountants expressing their opinion that the payments of principal
and interest when due will provide cash sufficient to pay the principal,
premium, and interest when due with respect to all the junior subordinated
debt securities of that series to maturity or redemption;
- 91 days pass after the deposit is made and during the 91-day period no
default described in the fifth bullet point under "--Events of Default,
Waiver and Notice of Default; Junior Subordinated Debt Securities in
Foreign Currencies" above with respect to Hispanic Broadcasting occurs
that is continuing at the end of the period;
- no default has occurred and is continuing on the date of the deposit;
- the deposit does not constitute a default under any other agreement
binding on Hispanic Broadcasting;
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- Hispanic Broadcasting delivers to the junior subordinated indenture
trustee an opinion of counsel to the effect that the trust resulting from
the deposit does not constitute a regulated investment company under the
Investment Company Act of 1940;
- Hispanic Broadcasting has delivered to the junior subordinated indenture
trustee an opinion of counsel addressing specific federal income tax
matters relating to the defeasance; and
- Hispanic Broadcasting delivers to the junior subordinated indenture
trustee an officers' certificate and an opinion of counsel stating that
all conditions to the defeasance and discharge of the junior subordinated
debt securities of that series have been complied with.
The junior subordinated indenture trustee will hold in trust cash or U.S.
Government Obligations deposited with it as described above and will apply the
deposited cash and the proceeds from deposited U.S. Government Obligations to
the payment of principal, premium, and interest with respect to the junior
subordinated debt securities of the defeased series.
CONCERNING THE JUNIOR SUBORDINATED INDENTURE TRUSTEE
We will identify the junior subordinated indenture trustee for the junior
subordinated debt securities in the relevant prospectus supplement. In specific
instances, Hispanic Broadcasting or the holders of a majority of the then
outstanding principal amount of the junior subordinated debt securities issued
under an indenture may remove the junior subordinated indenture trustee and
appoint a successor junior subordinated indenture trustee. The junior
subordinated indenture trustee may become the owner or pledgee of any of the
junior subordinated debt securities with the same rights, subject to conflict of
interest restrictions, it would have if it were not the junior subordinated
indenture trustee. The junior subordinated indenture trustee and any successor
trustee must be a corporation organized and doing business as a commercial bank
or trust company under the laws of the United States or of any state thereof,
authorized under those laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to examination
by federal or state authority. Subject to applicable law relating to conflicts
of interest, the junior subordinated indenture trustee may also serve as trustee
under other indentures relating to debt securities or junior subordinated debt
securities issued by Hispanic Broadcasting or its affiliated companies and may
engage in commercial transactions with Hispanic Broadcasting and its affiliated
companies. The initial junior subordinated indenture trustee under the junior
subordinated indenture is The Bank of New York.
CERTAIN COVENANTS OF HISPANIC BROADCASTING APPLICABLE TO THE JUNIOR SUBORDINATED
DEBT SECURITIES
If junior subordinated debt securities are issued to an HBC Trust in
connection with the issuance of preferred securities by the HBC Trust, Hispanic
Broadcasting covenants in the junior subordinated indenture that, so long as the
preferred securities of the HBC Trust remain outstanding, Hispanic Broadcasting
will not declare or pay any dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any common stock or
preferred stock or make any guarantee payments with respect thereto if at the
time
- Hispanic Broadcasting is in default with respect to its guarantee payments
or other payment obligations under the related guarantee;
- there shall have occurred any event of default with respect to the junior
subordinated debt securities; or
- in the event that junior subordinated debt securities are issued to the
applicable HBC Trust in connection with the issuance of preferred
securities by that HBC Trust, Hispanic Broadcasting has given notice of
its election to defer payments of interest on the junior subordinated debt
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securities by extending the interest payment period as provided in the
terms of the junior subordinated debt securities and period, or any
extension thereof, is continuing.
However, the foregoing restrictions shall not apply to
- dividends, redemptions, purchases, acquisitions, distributions or payments
made by Hispanic Broadcasting by way of issuance of shares of its capital
stock;
- any declaration of a dividend under a stockholder rights plan or in
connection with the implementation of a stockholder rights plan, the
issuance of Hispanic Broadcasting's capital stock under a stockholder
rights plan or the redemption or repurchase of any such right distributed
pursuant to a stockholder rights plan;
- payments of accrued dividends by Hispanic Broadcasting upon the
redemption, exchange or conversion of any preferred stock as may be
outstanding from time to time in accordance with the terms of the
preferred stock;
- cash payments made by Hispanic Broadcasting in lieu of delivering
fractional shares upon the redemption, exchange or conversion of any
preferred stock as may be outstanding from time to time in accordance with
the terms of the preferred stock;
- payments under the guarantees; or
- purchases of common stock related to the issuance of common stock or
rights under any of Hispanic Broadcasting's benefit plans for its
directors, officers or employees, or related to the issuance of common
stock or rights under a dividend reinvestment and stock purchase plan.
In addition, if junior subordinated debt securities are issued to an HBC
Trust in connection with the issuance of preferred securities by the HBC Trust,
for so long as the preferred securities of the HBC Trust remain outstanding,
Hispanic Broadcasting has agreed
- to remain the sole direct or indirect owner of all the outstanding common
securities issued by the HBC Trust and not to cause or permit the common
securities to be transferred except to the extent permitted by the
declaration of the HBC Trust; provided that any of Hispanic Broadcasting's
permitted successors under the junior subordinated indenture may succeed
to its ownership of the common securities;
- to comply fully with all its obligations and agreements under the
declaration; and
- not to take any action which would cause the HBC Trust to cease to be
treated as a grantor trust for federal income tax purposes, except in
connection with a distribution of junior subordinated debt securities.
SUBORDINATION
The junior subordinated debt securities will be subordinated and junior in
right of payment to Hispanic Broadcasting's other indebtedness to the extent set
forth in the applicable prospectus supplement.
The payment of the principal of, premium, if any, and interest on the junior
subordinated debt securities will be subordinated in right of payment to the
prior payment in full of all of Hispanic Broadcasting's senior indebtedness and
will rank equally with its trade creditors. No payment on account of principal
of, premium, if any, or interest on the junior subordinated debt securities and
no acquisition of, or payment on account of any sinking fund for, the junior
subordinated debt securities may be made unless full payment of amounts then due
for principal, premium, if any, and interest then due on all senior indebtedness
by reason of the maturity thereof, by lapse of time, acceleration or otherwise,
has been made or duly provided for in cash or in a manner satisfactory to the
holders of the
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senior indebtedness. In addition, the junior subordinated indenture provides
that if a default has occurred giving the holders of the senior indebtedness the
right to accelerate the maturity thereof, or an event has occurred which, with
the giving of notice, or lapse of time, or both, would constitute an event of
default, then unless and until that event has been cured or waived or has ceased
to exist, no payment on account of principal, premium, if any, or interest on
the junior subordinated debt securities and no acquisition of, or payment on
account of a sinking fund for, the junior subordinated debt securities may be
made. Hispanic Broadcasting will give prompt written notice to the junior
subordinated indenture trustee of any default under any senior indebtedness or
under any agreement pursuant to which senior indebtedness may have been issued.
The junior subordinated indenture provisions described in this paragraph,
however, do not prevent Hispanic Broadcasting from making a sinking fund payment
with junior subordinated debt securities acquired prior to the maturity of
senior indebtedness or, in the case of default, prior to the default and notice
thereof. Upon any distribution of Hispanic Broadcasting's assets in connection
with its dissolution, liquidation or reorganization, all senior indebtedness
must be paid in full before the holders of the junior subordinated debt
securities are entitled to any payments whatsoever. As a result of these
subordination provisions, in the event of Hispanic Broadcasting's insolvency,
holders of the junior subordinated debt securities may recover ratably less than
Hispanic Broadcasting's senior creditors.
For purposes of the description of the junior subordinated debt securities,
the term senior indebtedness means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of the
junior subordinated indenture or incurred or created
- after the execution of Hispanic Broadcasting's indebtedness for money
borrowed by it, including purchase money obligations with an original
maturity in excess of one year, or evidenced by securities, notes,
bankers' acceptances or other corporate debt securities or similar
instruments issued by Hispanic Broadcasting other than the junior
subordinated debt securities;
- obligations with respect to letters of credit;
- Hispanic Broadcasting's indebtedness constituting a guarantee of
indebtedness of others of the type referred to in the preceding two bullet
points; or
- renewals, extensions or refundings of any of the indebtedness referred to
in the preceding three bullet points unless, in the case of any particular
indebtedness, renewal, extension or refunding, under the express
provisions of the governing instrument provides that the indebtedness or
renewal, extension or refunding thereof is not superior in right of
payment to the junior subordinated debt securities.
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DESCRIPTION OF PREFERRED STOCK
Upon obtaining the consent of the holders of Class B common stock as
described in "Description of Common Stock--Class B Common Stock," the Hispanic
Broadcasting board of directors has the authority to issue up to 5,000,000
shares of preferred stock in one or more series. The board can designate the
rights, preferences, privileges, and qualifications of the preferred stock at
the time of the issuance, without any further vote or action by the
stockholders. A future issuance of preferred stock could have one or all of the
following effects:
- decrease the amount of earnings and assets available for distribution to
holders of Class A and Class B common stock;
- adversely affect the rights and powers, including voting rights, of
holders of Class A and Class B common stock; and
- delay, defer or prevent a change in control of the company.
There are currently no shares of preferred stock issued or outstanding. The
particular terms of any series of preferred stock will be described in a
prospectus supplement.
DESCRIPTION OF COMMON STOCK
The board of directors has the authority to issue up to 100,000,000 shares
of Class A common stock, $.001 par value per share, and 50,000,000 shares of
Class B common stock, $.001 par value per share.
Class A and Class B common stock have identical rights except for voting
rights and certain rights of the Class B common stockholders to convert their
shares into Class A common stock. In the event that the board of directors
declares dividends out of legally available funds, holders of Class A and
Class B common stock are entitled to ratably receive the dividends, subject to
the payment of any preferential dividends with respect to any preferred stock
outstanding at the time. In the event of Hispanic Broadcasting's liquidation,
dissolution or winding up, holders of Class A and Class B common stock are
entitled to share ratably in any assets available for distribution to
stockholders after payment of all obligations of the company, subject to the
payment of any preferential distributions with respect to any preferred stock
outstanding at the time.
Holders of Class A and Class B common stock do not have cumulative voting
rights or preemptive or other rights to acquire or subscribe to additional,
unissued or treasury shares.
CLASS A COMMON STOCK
Holders of the Class A common stock are entitled to one vote per share on
all matters submitted to a vote of the stockholders.
CLASS B COMMON STOCK
Holders of the Class B common stock have voting rights limited to certain
specified decisions and actions. Specifically, the holders of a majority of the
Class B common stock voting as a single class must grant approval or consent
before Hispanic Broadcasting can take any of the following actions:
- sell, lease or otherwise transfer all or substantially all of our assets;
- effect any merger or consolidation where the stockholders immediately
before the proposed merger or consolidation would not own at least 50% of
the capital stock of the surviving entity after the proposed merger or
consolidation;
- effect any reclassification, recapitalization, dissolution, liquidation or
winding up;
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- authorize, issue or obligate Hispanic Broadcasting to issue any shares of
preferred stock;
- make or permit any amendment to the certificate of incorporation that
adversely affects the rights of the holders of our Class B common stock;
- declare or pay any non-cash dividends on or make any other non-cash
distribution on any class of common stock; or
- make or permit any amendment or modification to the certificate of
incorporation concerning any of our capital stock.
With respect to each of these matters, each share of Class B common stock is
entitled to one vote. These class voting rights will end once Clear Channel and
its affiliates own less than 20% of the aggregate of all of our outstanding
Class A and Class B common stock.
Only Clear Channel and its affiliates may own shares of Class B common
stock. The outstanding Class B common stock will convert into Class A common
stock automatically upon sale, gift or other transfer to a person or entity
other than Clear Channel or an affiliate of Clear Channel. Each holder of
Class B common stock has the option to convert its Class B common stock into
Class A common stock upon receipt of all required regulatory consents. In
addition, Clear Channel has the option to convert any of its shares of Class A
common stock that it may own from time to time into shares of Class B common
stock.
REGISTRATION RIGHTS AGREEMENTS; STOCKHOLDERS AGREEMENT; VOTING AGREEMENT
Hispanic Broadcasting completed a merger with Tichenor Media System, Inc. on
February 14, 1997. At the time of this merger, Hispanic Broadcasting entered
into a registration rights agreement with Clear Channel and with certain former
Tichenor stockholders. As a result of these agreements, Hispanic Broadcasting
may be required to file registration statements with the SEC to register for
resale shares of Class A common stock received by each of these parties.
At the time of our merger with Tichenor Media System, Inc., Hispanic
Broadcasting also entered into a stockholders agreement with Clear Channel and
certain former Tichenor stockholders in order to impose certain restrictions on
the transferability of their shares, to grant certain rights of first refusal
and to address the rights of the parties in the event of future sales of our
common stock.
CERTAIN ANTI-TAKEOVER EFFECTS OF CHARTER AND DELAWARE LAW
The voting rights of the Class B stockholders and certain provisions of the
Delaware General Corporation Law may each have the effect of impeding tender
offers, proxy fights, open market purchases or other events which could effect a
change in control of Hispanic Broadcasting.
Hispanic Broadcasting's certificate of incorporation grants holders of
Class B common stock the right to vote separately as a class on certain matters,
including a merger or sale of all or substantially all of Hispanic
Broadcasting's assets. In addition, holders of Class B common stock have the
option to convert their shares into Class A common stock upon receipt of
required regulatory approvals. Thus, Clear Channel and its affiliates, as the
sole owners of Class B common stock, can exert a significant influence over any
potential change in control of Hispanic Broadcasting.
The Delaware General Corporation Law restricts a wide range of transactions
between a corporation and any of its interested stockholders. Under Delaware
law, an interested stockholder generally means any stockholder who beneficially
owns, directly or indirectly, 15% or more of the corporation's outstanding
voting stock. For a period of three years from the time a stockholder becomes an
interested stockholder, such stockholder cannot:
- enter into a merger or consolidation with the corporation;
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- acquire more than 10% of the corporation's assets;
- engage in certain transactions which would increase the proportionate
share of stock owned by such stockholder; or
- disproportionately benefit from any loans, advances or other financial
benefits from the corporation.
However, these restrictions do not apply to an interested stockholder who
owned at least 85% of the corporation's voting stock at the time it initially
became an interested stockholder. Furthermore, the restrictions do not apply if:
- before the person became an interested stockholder, the board of directors
approved either the transaction proposed by the interested stockholder or
the transaction which resulted in the person becoming an interested
stockholder; or
- the business combination is approved by the board of directors and
authorized by the affirmative vote of at least 66 2/3% of the outstanding
voting stock not owned by the interested stockholder.
FOREIGN OWNERSHIP
The Federal Communications Act and certain rules established by the FCC
impose certain restrictions on foreign ownership of and voting control over our
capital stock. Accordingly, our certificate of incorporation prohibits aliens,
foreign governments, or non-U.S. corporations from directly or indirectly owning
or acquiring voting control of more than 25% of our outstanding capital stock.
It also prohibits any transfer of our capital stock which would result in a
violation of this prohibition and authorizes our board of directors to adopt
such provisions as it deems necessary to enforce these prohibitions.
DESCRIPTION OF WARRANTS
Hispanic Broadcasting may issue warrants for the purchase of debt securities
or junior subordinated debt securities, or shares of preferred stock or Class A
common stock. Warrants may be issued independently or together with any debt
securities, junior subordinated debt securities, or shares of preferred stock or
Class A common stock offered by any prospectus supplement and may be attached to
or separate from the debt securities, junior subordinated debt securities, or
shares of preferred stock or Class A common stock. The warrants are to be issued
under warrant agreements to be entered into between Hispanic Broadcasting and
The Bank of New York, as warrant agent, or the other bank or trust company as is
named in the prospectus supplement relating to the particular issue of warrants.
The warrant agent will act solely as an agent of Hispanic Broadcasting in
connection with the warrants and will not assume any obligation or relationship
of agency or trust for or with any holders of warrants or beneficial owners of
warrants. The following description summarizes certain general provisions of the
form of warrant agreement to which any prospectus supplement may relate. We will
describe the specific terms of any warrants and the extent, if any, to which the
general provisions summarized below may apply to any warrants in the prospectus
supplement relating to those warrants.
GENERAL
If warrants are offered, we will describe in a prospectus supplement the
terms of the warrants, including the following:
- the offering price;
- the currency, currencies or currency units for which warrants may be
purchased;
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- the designation, aggregate principal amount, currency, currencies or
currency units and terms of the debt securities or junior subordinated
debt securities purchasable upon exercise of the debt warrants and the
price at which the debt securities or junior subordinated debt securities
may be purchased;
- the designation, number of shares and terms of the preferred stock
purchasable upon exercise of the preferred stock warrants and the price at
which the shares of preferred stock may be purchased;
- the designation, number of shares and terms of the Class A common stock
purchasable upon exercise of the common stock warrants and the price at
which the shares of Class A common stock may be purchased;
- if applicable, the designation and terms of the debt securities, junior
subordinated debt securities, preferred stock or Class A common stock with
which the warrants are issued and the number of warrants issued with each
debt security, junior subordinated debt security or share of preferred
stock or Class A common stock;
- if applicable, the date on and after which the warrants and the related
debt securities, junior subordinated debt securities, preferred stock or
Class A common stock will be separately transferable;
- the date on which the right to exercise the warrants will commence and the
date on which the right will expire;
- whether the warrants will be issued in registered or bearer form;
- a discussion of federal income tax, accounting and other special
considerations, procedures and limitations relating to the warrants; and
- any other terms of the warrants.
Warrants may be exchanged for new warrants of different denominations, may
(if in registered form) be presented for registration of transfer, and may be
exercised at the corporate trust office of the warrant agent or any other office
indicated in the prospectus supplement. Before the exercise of their warrants,
holders of warrants will not have any of the rights of holders of the various
securities purchasable upon exercise of the warrants, including the right to
receive payments of principal of, any premium on, or any interest on, the debt
securities or junior subordinated debt securities purchasable upon the exercise
or to enforce the covenants in the indenture or to receive payments of
dividends, if any, on the preferred stock or Class A common stock purchasable
upon the exercise or to exercise any applicable right to vote. If Hispanic
Broadcasting maintains the ability to reduce the exercise price of any stock
warrant and the right is triggered, it will comply with the federal securities
laws, including Rule 13e-4 under the Exchange Act of 1934, to the extent
applicable.
EXERCISE OF WARRANTS
Each warrant will entitle the holder to purchase a principal amount of debt
securities or junior subordinated debt securities or a number of shares of
preferred stock or Class A common stock at the exercise price as will in each
case be set forth in, or calculable from, the prospectus supplement relating to
the warrant. Warrants may be exercised at the times that are set forth in the
prospectus supplement relating to the warrants. After the close of business on
the date on which the warrant will expire, or any later date to which Hispanic
Broadcasting may extend the expiration date, unexercised warrants will become
void.
Subject to any restrictions and additional requirements that may be set
forth in a prospectus supplement relating thereto, warrants may be exercised by
delivery to the warrant agent of the
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certificate evidencing the warrants properly completed and duly executed and of
payment as provided in the prospectus supplement of the amount required to
purchase the debt securities, junior subordinated debt securities or shares of
preferred stock or Class A common stock purchasable upon exercise. The exercise
price will be the price applicable on the date of payment in full, as set forth
in the prospectus supplement relating to the warrants. Upon receipt of the
payment and the certificate representing the warrants to be exercised, properly
completed and duly executed at the corporate trust office of the warrant agent
or any other office indicated in the prospectus supplement, Hispanic
Broadcasting will, as soon as practicable, issue and deliver the debt
securities, junior subordinated debt securities or shares of preferred stock or
Class A common stock purchasable upon exercise. If fewer than all of the
warrants represented by a certificate are exercised, a new certificate will be
issued for the remaining amount of warrants.
ADDITIONAL PROVISIONS
The exercise price payable and the number of shares of common or preferred
stock purchasable upon the exercise of each stock warrant will be subject to
adjustment in specific events, including the issuance of a stock dividend to
holders of common or preferred stock, respectively, or a combination,
subdivision or reclassification of common or preferred stock, respectively. In
lieu of adjusting the number of shares of common or preferred stock purchasable
upon exercise of each stock warrant, Hispanic Broadcasting may elect to adjust
the number of stock warrants. No adjustment in the number of shares purchasable
upon exercise of the stock warrants will be required until cumulative
adjustments require an adjustment of at least 1% thereof. Hispanic Broadcasting
may, at its option, reduce the exercise price at any time. No fractional shares
will be issued upon exercise of stock warrants, but Hispanic Broadcasting will
pay the cash value of any fractional shares otherwise issuable in case of any
consolidation, merger, or sale or conveyance of the property of Hispanic
Broadcasting as an entirety or substantially as an entirety, the holder of each
outstanding stock warrant will have the right upon the exercise to the kind and
amount of shares of stock and other securities and property, including cash,
receivable by a holder of the number of shares of Class A common stock or
preferred stock into which the stock warrants were exercisable immediately prior
thereto.
NO RIGHTS AS STOCKHOLDERS
Holders of stock warrants will not be entitled, by virtue of being the
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
Hispanic Broadcasting's directors or any other matter, or to exercise any rights
whatsoever as its stockholders.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
Hispanic Broadcasting may issue stock purchase contracts. Stock purchase
contracts are contracts obligating holders to purchase from Hispanic
Broadcasting, and Hispanic Broadcasting to sell to the holders, a specified
number of shares of Class A common stock or preferred stock at a future date or
dates. The price per share of Class A common stock or preferred stock may be
fixed at the time the stock purchase contracts are issued or may be determined
by reference to a specific formula set forth in the stock purchase contracts.
The formulas may include anti-dilution provisions to adjust the number of shares
issuable under the stock purchase contracts upon events that would otherwise
dilute the interests of the holders. The stock purchase contracts may be issued
separately or as a part of stock purchase units each representing ownership of a
stock purchase contract and debt securities, debt obligations of the United
States of America or its agencies or instrumentalities, or preferred securities
securing the holders' obligations to purchase the Class A common stock or the
preferred stock under the stock purchase contracts.
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When stock purchase units include debt obligations of the United States of
America or its agencies or instrumentalities, the principal of the debt
obligations, when paid at maturity, will automatically be applied to satisfy the
holder's obligation to purchase Class A common stock or preferred stock under
the stock purchase contracts unless the holder of the units settles its
obligations under the stock purchase contracts early through the delivery of
consideration to Hispanic Broadcasting or its agent in the manner discussed
below.
When stock purchase units include debt securities or preferred securities,
the debt securities or preferred securities will automatically be presented to
the applicable HBC Trust for redemption at 100% of face or liquidation value and
the HBC Trust will present junior subordinated debt securities in an equal
principal amount to Hispanic Broadcasting for redemption at 100% of principal
amount unless there is an early settlement or the holder elects to pay the
consideration specified in the stock purchase contracts. Amounts received in
respect of the redemption will automatically be transferred to Hispanic
Broadcasting and applied to satisfy in full the holder's obligation to purchase
Class A common stock or preferred stock under the stock purchase contracts. The
stock purchase contracts may require Hispanic Broadcasting to make periodic
payments to the holders of the stock purchase units or vice versa, and the
payments may be unsecured or refunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a specified manner.
Holders of stock purchase units may be entitled to settle the underlying
stock purchase contracts prior to the stated settlement date by surrendering the
certificate evidencing the stock purchase units, accompanied by the payment due,
in any form and calculated pursuant to any formula as may be prescribed in the
stock purchase contracts and described in the applicable prospectus supplement.
Upon early settlement, the holder would receive the number of shares of Class A
common stock or preferred stock deliverable under the stock purchase contracts,
subject to adjustment in specific cases. Holders of stock purchase units may be
entitled to exchange their stock purchase units together with appropriate
collateral, for separate stock purchase contracts and preferred securities, debt
securities, junior subordinated debt securities or debt obligations of the
United States of America or its agencies or instrumentalities. In the event of
either an early settlement or exchange, the preferred securities, debt
securities, junior subordinated debt securities or debt obligations that were
pledged as security for the obligation of the holder to perform under the stock
purchase contracts would be transferred to the holder free and clear of Hispanic
Broadcasting's security interest.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units including differences, if any, from
the term described above.
DESCRIPTION OF PREFERRED SECURITIES
Each HBC Trust may issue, from time to time, only one series of preferred
securities having terms described in the prospectus supplement relating thereto.
The declaration of trust under which each HBC Trust is formed will be replaced
by an amended and rested declaration of trust, which will authorize the regular
trustees of the HBC Trust to issue on behalf of the HBC Trust one series of
preferred securities. Each amended and restated declaration of trust will be
qualified as an indenture under the Trust Indenture Act. The preferred
securities will have terms, including distributions, redemption, voting,
liquidation rights and other preferred, deferred or other special rights or
restrictions as will be set forth in the amended and restated related
declaration of trust or made part of the declaration by the Trust Indenture Act.
Reference is made to the prospectus supplement relating to the preferred
securities of an HBC Trust for specific terms, including
- the specific designation of the preferred securities;
- the number of preferred securities issued by the HBC Trust;
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- the annual distribution rate, or method of calculation of the rate, for
preferred securities issued by the HBC Trust, the date or dates upon which
the distributions will be payable and the record date or dates for the
payment of the distributions;
- whether distributions on preferred securities issued by the HBC Trust will
be cumulative, and, in the case of preferred securities having cumulative
distribution rights, the date or dates or method of determining the date
or dates from which distributions on preferred securities issued by the
HBC Trust will be cumulative;
- the amount or amounts which will be paid out of the assets of the HBC
Trust to the holders of preferred securities of the HBC Trust upon
voluntary or involuntary liquidation, dissolution, winding-up or
termination of the HBC Trust;
- the obligation or right, if any, of the HBC Trust to purchase or redeem
preferred securities issued by the HBC Trust and the price or prices at
which, the period or periods within which and the terms and conditions
upon which preferred securities issued by the HBC Trust will or may be
purchased or redeemed, in whole or in part, pursuant to an obligation or
right;
- the voting rights, if any, of preferred securities issued by the HBC Trust
in addition to those required by law, including the number of votes per
preferred security and any requirement for the approval by the holders of
preferred securities, or of preferred securities issued by one or more HBC
Trusts, or of both, as a condition to specified actions or amendments to
the declaration of the HBC Trust;
- the terms and conditions upon which the preferred securities may be
convertible into or exchanged for Class A common stock, preferred stock,
debt securities, junior subordinated debt securities, or indebtedness or
other securities of any kind of Hispanic Broadcasting; and
- any other relevant rights, preferences, privileges, limitations or
restrictions of preferred securities issued by the HBC Trust consistent
with the declaration of the HBC Trust or with applicable law.
All preferred securities offered hereby will be guaranteed by Hispanic
Broadcasting as and to the extent set forth below under "Description of the
Guarantees" below.
In connection with the issuance of preferred securities, each HBC Trust will
issue one series of common securities. The amended and restated declaration of
each HBC Trust will authorize the regular trustees of such HBC Trust to issue on
behalf of the HBC Trust one series of common securities having terms including
distributions, redemption, voting, liquidation rights or restrictions as set
forth in the amended and restated declaration of trust. The terms of the common
securities issued by an HBC Trust will be substantially identical to the terms
of the preferred securities issued by the HBC Trust. The common securities will
rank equally with the preferred securities and payments on the common securities
will be made on a pro rata basis with the preferred securities. However, if an
event of default under the amended and restated declaration of trust occurs and
is continuing, the rights of the holders of the common securities to payment in
respect of distributions and payments upon liquidation, redemption and maturity
will be subordinated to the rights of the holders of the preferred securities.
Generally, the common securities issued by an HBC Trust will also carry the
right to vote and to appoint, remove or replace any of the trustees of the HBC
Trust. All the common securities of an HBC Trust will be directly or indirectly
owned by Hispanic Broadcasting.
As long as payments of interest and other payments are made when due on the
junior subordinated debt securities, the payments will be sufficient to cover
distributions and other payments due on the preferred securities primarily
because the aggregate principal amount of junior subordinated debt securities
held as trust assets will be equal to the sum of the aggregate stated
liquidation amount of the preferred securities; and the interest rate and
interest and other payment dates on the junior
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subordinated debt securities will match the distribution rate and distribution
and other payment dates for the preferred securities.
If an event of default with respect to the amended and restated declaration
of any HBC Trust occurs and is continuing, then the holders of preferred
securities of the HBC Trust would rely on the enforcement by the property
trustee of its rights as a holder of the junior subordinated debt securities
deposited in the HBC Trust against Hispanic Broadcasting. In addition, the
holders of a majority in liquidation amount of the preferred securities will
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the property trustee or to direct the
exercise of power conferred upon the property trustee under the amended and
restated declaration of trust, including the right to direct the property
trustee to exercise the remedies available to it as a holder of the junior
subordinated debt securities. If the property trustee fails to enforce its
rights under the junior subordinated debt securities deposited in the HBC Trust,
any holder of the preferred securities may, to the extent permitted by
applicable law, after a period of 60 days has elapsed from the holder's written
request, institute a legal proceeding against Hispanic Broadcasting to enforce
the property trustee's rights under the junior subordinated debt securities
without first instituting any legal proceeding against the property trustee or
any other person or entity. If an event of default with respect to the amended
and restated declaration of any HBC Trust occurs and is continuing and the event
is attributable to the failure of Hispanic Broadcasting to pay interest or
principal on the junior subordinated debt securities on the date the interest or
principal is otherwise payable, or in the case of redemption, on the redemption
date, then a holder of preferred securities of the HBC Trust may also directly
institute a proceeding for enforcement of payment to the holder of the principal
of or interest on the junior subordinated debt securities having a principal
amount equal to the aggregate liquidation amount of the preferred securities
held by the holder on or after the respective due date specified in the junior
subordinated debt securities without first directing the property trustee to
enforce the terms of the junior subordinated debt securities or instituting a
legal proceeding against Hispanic Broadcasting to enforce the property trustee's
rights under the junior subordinated debt securities. In connection with such a
direct action, the rights of Hispanic Broadcasting will be substituted for the
rights of such holder of such preferred securities under such declaration of
trust to the extent of any payment made by Hispanic Broadcasting to the holder
of such preferred securities in such a direct action. The holders of preferred
securities of an HBC Trust will not be able to exercise directly any other
remedy available to the holders of the junior subordinated debt securities
unless the property trustee first fails to do so.
Federal income tax considerations applicable to an investment in preferred
securities will be described in the prospectus supplement relating thereto.
The property trustee and its affiliates may provide customary commercial
banking services to Hispanic Broadcasting and its subsidiaries and participate
in various financing agreements of Hispanic Broadcasting in the ordinary course
of their business. Initially, the property trustee is The Bank of New York.
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DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the guarantees that
will be executed and delivered from time to time by Hispanic Broadcasting for
the benefit of the holders of preferred securities of an HBC Trust. Each
preferred security guarantee will be separately qualified under the Trust
Indenture Act and will be held by The Bank of New York, acting in its capacity
as guarantee trustee with respect to the guarantee, for the benefit of holders
of the preferred securities of the applicable HBC Trust. The terms of each
guarantee will be set forth in the guarantee or made part of the guarantee by
the Trust Indenture Act.
GENERAL
Pursuant to each guarantee, Hispanic Broadcasting will irrevocably and
unconditionally agree, to the extent set forth in the guarantee, to pay in full,
to the holders of the preferred securities issued by the applicable HBC Trust,
the guarantee payments, to the extent not paid by the HBC Trust, regardless of
any defense, right of set-off or counterclaim that the HBC Trust may have or
assert. The following distributions and other payments with respect to preferred
securities issued by an HBC Trust to the extent not made or paid by the HBC
Trust, will be subject to the guarantee without duplication:
- any accrued and unpaid distributions on the preferred securities, but only
if and to the extent that in each case Hispanic Broadcasting has made a
payment to the property trustee of interest on the junior subordinated
debt securities;
- the redemption price, including all accrued and unpaid distributions to
the date of redemption, with respect to any preferred securities called
for redemption by the HBC Trust, but only if and to the extent that in
each case Hispanic Broadcasting has made a payment to the property trustee
of interest or principal on the junior subordinated debt securities
deposited in the HBC Trust as trust assets; and
- upon a voluntary or involuntary liquidation, dissolution, winding-up or
termination of the HBC Trust, other than in connection with the
distribution of related junior subordinated debt securities to the holders
of the preferred securities or the redemption of all the preferred
securities upon the maturity or redemption of the junior subordinated debt
securities, the lesser of
- the aggregate of the liquidation amount and all accrued and unpaid
distributions on the preferred securities to the date of payment, to
the extent the HBC Trust has funds available to make the payment, and
- the amount of assets of the HBC Trust remaining available for
distribution to holders of the preferred securities upon liquidation of
the HBC Trust.
Hispanic Broadcasting's obligation to make a guarantee payment may be
satisfied by direct payment of the required amounts by Hispanic Broadcasting to
the holders of the applicable preferred securities or by causing the applicable
HBC Trust to pay the amounts to the holders.
The guarantee is a full and unconditional guarantee from the time of
issuance of the applicable preferred securities, but the guarantee covers
distributions and other payments on the preferred securities only if and to the
extent that Hispanic Broadcasting has made a payment to the property trustee of
interest or principal on the junior subordinated debt securities deposited in
the applicable HBC Trust as trust assets. If Hispanic Broadcasting does not make
interest or principal payments on the junior subordinated debt securities
deposited in the applicable HBC Trust as trust assets, the property trustee will
not make distributions on the preferred securities of the HBC Trust and the HBC
Trust will not have the necessary funds available to make these payments.
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Hispanic Broadcasting's obligations under the declaration for each HBC
Trust, the guarantee issued with respect to preferred securities issued by the
HBC Trust, the junior subordinated debt securities purchased by the HBC Trust
and the junior subordinated indenture in the aggregate will provide a full and
unconditional guarantee on a subordinated basis by Hispanic Broadcasting of
payments due on the preferred securities issued by the HBC Trust.
CERTAIN COVENANTS OF HISPANIC BROADCASTING
In each guarantee, Hispanic Broadcasting will covenant that, so long as any
preferred securities issued by the applicable HBC Trust remain outstanding,
Hispanic Broadcasting will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect to,
any common stock or preferred stock or make any guarantee payment with respect
to these amounts, if at the time
- Hispanic Broadcasting will be in default with respect to its guarantee
payments or other payment obligations under the guarantee;
- any event of default under the related amended and restated declaration of
trust has occurred; or
- in the event that junior subordinated debt securities are issued to the
applicable HBC Trust in connection with the issuance of preferred
securities by the HBC Trust, Hispanic Broadcasting has given notice of its
election to defer payments of interest on the junior subordinated debt
securities by extending the interest payment period as provided in the
terms of the junior subordinated debt securities and the period, or any
extension thereof, is continuing.
However, the foregoing restrictions will not apply to
- dividends, redemptions, purchases, acquisitions, distributions or payments
made by Hispanic Broadcasting by way of issuance of shares of its capital
stock;
- any declaration of a dividend under a stockholder rights plan or in
connection with the implementation of a stockholder rights plan, the
issuance of capital stock of Hispanic Broadcasting under a stockholder
rights plan or the redemption or repurchase of any right distributed
pursuant to a stockholder rights plan;
- payments of accrued dividends by Hispanic Broadcasting upon the
redemption, exchange or conversion of any preferred stock as may be
outstanding from time to time in accordance with the terms of the
preferred stock;
- cash payments made by Hispanic Broadcasting in lieu of delivering
fractional shares upon the redemption, exchange or conversion of any
preferred stock as may be outstanding from time to time in accordance with
the terms of the preferred stock;
- payments under the guarantees; or
- purchases of common stock related to the issuance of common stock or
rights under any of Hispanic Broadcasting's benefit plans for its
directors, officers or employees, or related to the issuance of common
stock or rights under a dividend reinvestment and stock purchase plan.
In addition, so long as any preferred securities of an HBC Trust remain
outstanding, Hispanic Broadcasting has agreed to remain the sole direct or
indirect owner of all the outstanding common securities issued by the HBC Trust
and not to cause or permit the common securities to be transferred except to the
extent permitted by the declaration of the HBC Trust, provided that any
permitted successor of Hispanic Broadcasting under the junior subordinated
indenture may succeed to Hispanic Broadcasting's ownership of the common
securities, and to use reasonable efforts to cause the HBC
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Trust to continue to be treated as a grantor trust for federal income tax
purposes, except in connection with a distribution of junior subordinated debt
securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of the applicable preferred securities, in which case no consent will
be required, each guarantee may be amended only with the prior approval of the
holders of not less than 66 2/3% in liquidation amount of the outstanding
preferred securities issued by the applicable HBC Trust. The manner of obtaining
any such approval of holders of the preferred securities will be set forth in an
accompanying prospectus supplement. All guarantees and agreements contained in a
guarantee will bind the successors, assignees, receivers, trustees and
representatives of Hispanic Broadcasting and will inure to the benefit of the
holders of the preferred securities of the applicable HBC Trust then
outstanding. Except in connection with a consolidation, merger, conveyance, or
transfer of assets involving Hispanic Broadcasting that is permitted under the
junior subordinated indenture, Hispanic Broadcasting may not assign its
obligations under any guarantee.
TERMINATION OF THE GUARANTEES
Each guarantee will terminate and be of no further force and effect as to
the preferred securities issued by the applicable HBC Trust upon full payment of
the redemption price of all preferred securities of the HBC Trust, or upon
distribution of the junior subordinated debt securities to the holders of the
preferred securities of the HBC Trust in exchange for all the preferred
securities issued by the HBC Trust, or upon full payment of the amounts payable
upon liquidation of the HBC Trust. Nevertheless, each guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of preferred securities issued by the applicable HBC Trust must restore
payment of any sums paid under the preferred securities or the guarantee.
STATUS OF THE GUARANTEES
Hispanic Broadcasting's obligations to make the guarantee payments to the
extent set forth in the applicable guarantee will constitute an unsecured
obligation of Hispanic Broadcasting and will rank subordinate and junior in
right of payment to all other indebtedness, liabilities and obligations of
Hispanic Broadcasting and any guarantees, endorsements or other contingent
obligations of Hispanic Broadcasting, except those made on an equal basis or
subordinate by their terms, and senior to all capital stock now or hereafter
issued by Hispanic Broadcasting and to any guarantee now or hereafter entered
into by Hispanic Broadcasting in respect of any of its capital stock. Hispanic
Broadcasting's obligations under each guarantee will rank equally with each
other guarantee. Because Hispanic Broadcasting is a holding company, Hispanic
Broadcasting's obligations under each guarantee are also effectively
subordinated to all existing and future liabilities, including trade payables,
of Hispanic Broadcasting's subsidiaries, except to the extent that Hispanic
Broadcasting is a creditor of the subsidiaries recognized as such. Each amended
and restated declaration of trust will provide that each holder of preferred
securities issued by the applicable HBC Trust, by acceptance thereof, agrees to
the subordination provisions and other terms of the related guarantee.
The guaranteed party may institute a legal proceeding directly against
Hispanic Broadcasting to enforce its rights under a guarantee without first
instituting a legal proceeding against any other person or entity. Each
guarantee will be deposited with the guarantee trustee, to be held for the
benefit of the holders of the preferred securities issued by the applicable HBC
Trust. The guarantee trustee will enforce the guarantee on behalf of the holders
of the preferred securities. The holders of not less than a majority in
aggregate liquidation amount of the preferred securities issued by the
applicable HBC Trust have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the related
guarantee, including the giving of directions to the guarantee trustee.
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<PAGE>
If the guarantee trustee fails to enforce a guarantee as above provided, any
holder of preferred securities issued by the applicable HBC Trust may institute
a legal proceeding directly against Hispanic Broadcasting to enforce its rights
under the guarantee, without first instituting a legal proceeding against the
applicable HBC Trust, or any other person or entity. However, if Hispanic
Broadcasting has failed to make a guarantee payment, a holder of preferred
securities may directly institute a proceeding against Hispanic Broadcasting for
enforcement of the holder's right to receive payment under the guarantee.
Hispanic Broadcasting waives any right or remedy to require that any action be
brought first against an HBC Trust or any other person or entity before
proceeding directly against Hispanic Broadcasting.
MISCELLANEOUS
Hispanic Broadcasting will be required to provide annually to the guarantee
trustee a statement as to the performance by Hispanic Broadcasting of its
obligations under each guarantee and as to any default in the performance.
Hispanic Broadcasting is required to file annually with the guarantee trustee an
officer's certificate as to Hispanic Broadcasting's compliance with all
conditions to be complied with by it under each guarantee.
The guarantee trustee, prior to the occurrence of a default, undertakes to
perform only those duties as are specifically set forth in the applicable
guarantee and, after default with respect to a guarantee, will exercise the same
degree of care as a prudent individual would exercise under the circumstances in
the conduct of his or her own affairs. Subject to that provision, the guarantee
trustee is under no obligation to exercise any of the powers vested in it by a
preferred securities guarantee at the request of any holder of preferred
securities unless it is offered reasonable security and indemnity against the
costs, expenses and liabilities that might be incurred thereby.
ERISA MATTERS
Hispanic Broadcasting and its affiliates may each be considered a "party in
interest" within the meaning of the Employee Retirement Income Security Act or a
"disqualified person" within the meaning of Section 4975 of the Internal Revenue
Code with respect to many employee benefit plans that are subject to ERISA. The
purchase of any securities offered by this prospectus by a plan that is subject
to the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of Section 4975 of the Internal Revenue Code, including
individual retirement arrangements and other plans described in
Section 4975(e)(1), and with respect to which Hispanic Broadcasting or any
affiliate of Hispanic Broadcasting is a service provider, a party in interest or
a disqualified person, may constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Internal Revenue Code, unless the securities
offered by this prospectus are acquired pursuant to and in accordance with an
applicable exemption. Any pension or other employee benefit plan proposing to
acquire any securities offered by this prospectus should consult with its
counsel.
PLAN OF DISTRIBUTION
Hispanic Broadcasting or the HBC Trusts may sell the securities offered by
this prospectus
- through underwriters or dealers;
- through agents;
- directly to purchasers; or
- through a combination of any such methods of sale.
37
<PAGE>
Any underwriter, dealer or agent may be deemed to be an underwriter within
the meaning of the Securities Act. The prospectus supplement relating to the
securities offered by this prospectus will set forth:
- their offering terms, including the name or names of any underwriters,
dealers or agents;
- the purchase price of the securities offered by this prospectus;
- the proceeds to Hispanic Broadcasting or the HBC Trusts from such sale;
- any underwriting discounts, commissions and other items constituting
compensation to underwriters, dealers or agents;
- any initial public offering price, any discounts or concessions allowed or
reallowed or paid by underwriters or dealers to other dealers; and
- any securities exchanges on which the securities offered by this
prospectus may be listed.
If underwriters or dealers are used in the sale, the securities offered by
this prospectus will be acquired by the underwriters or dealers for their own
account and may be resold from time to time
- in one or more transactions;
- at a fixed price or prices, which may be changed;
- at market prices prevailing at the time of sale;
- at prices related to the prevailing market prices at the time of the sale;
or
- at negotiated prices.
The securities offered by this prospectus may be offered to the public
either through underwriting syndicates represented by one or more managing
underwriters or directly by one or more of those firms. Unless otherwise set
forth in the prospectus supplement, the obligations of underwriters or dealers
to purchase the securities offered by this prospectus will be subject to
specific conditions precedent and the underwriters or dealers will be obligated
to purchase all the securities offered by this prospectus if any are purchased.
Any public offering price and any discounts or concessions allowed or reallowed
or paid by underwriters or dealers to other dealers may be changed from time to
time.
The securities offered by this prospectus may be sold directly by Hispanic
Broadcasting or the HBC Trusts or through agents designated by Hispanic
Broadcasting or the HBC Trusts. Any agent involved in the offer or sale of the
securities offered by this prospectus in respect of which this prospectus is
delivered will be named, and any commissions payable by Hispanic Broadcasting or
the HBC Trusts to the agent will be set forth, in the prospectus supplement.
Unless otherwise indicated in the prospectus supplement, any agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the prospectus supplement, Hispanic Broadcasting or the
HBC Trusts will authorize underwriters, dealers or agents to solicit offers by
specific institutions to purchase securities offered by this prospectus from
Hispanic Broadcasting or the HBC Trusts at the public offering price set forth
in the prospectus supplement pursuant to delayed delivery contracts providing
for payment and delivery on a specified date in the future. The contracts will
be subject to any conditions set forth in the prospectus supplement and the
prospectus supplement will set forth the commission payable for solicitation of
the contracts. The underwriters and other persons soliciting the contracts will
have no responsibility for the validity or performance of any the contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with Hispanic Broadcasting or the HBC Trusts to indemnification by Hispanic
Broadcasting or the HBC Trusts against certain civil liabilities, including
liabilities under the Securities Act, or to contribution by Hispanic
38
<PAGE>
Broadcasting or the HBC Trusts to payments they may be required to make in
respect thereof. The terms and conditions of the indemnification obligations
will be described in an applicable prospectus supplement. Underwriters, dealers
and agents may be customers of, engage in transactions with, or perform services
for, Hispanic Broadcasting or the HBC Trusts in the ordinary course of business.
Each series of securities offered by this prospectus may be a new issue of
securities with no established trading market. Any underwriters to whom
securities offered by this prospectus are sold by Hispanic Broadcasting or the
HBC Trusts for public offering and sale may make a market in the securities
offered by this prospectus, but the underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any securities
offered by this prospectus.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. The underwriters may
over-allot shares of the Class A common stock in connection an offering of
Class A common stock, thereby creating a short position in the underwriters'
account. Syndicate covering transactions involve purchases of the debt
securities or junior subordinated debt securities in the open market after the
distribution has been completed in order to cover syndicate short positions.
Stabilizing and syndicate covering transactions may cause the price of the debt
securities or junior subordinated debt securities to be higher than it would
otherwise be in the absence of those transactions. These transactions, if
commenced, may be discontinued at any time.
LEGAL OPINIONS
The validity of the securities will be passed upon for Hispanic Broadcasting
by its special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P., San Antonio,
Texas. However, certain matters of Delaware Law relating to the validity of the
preferred securities will be passed upon for Hispanic Broadcasting and the HBC
Trusts by Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware, special
Delaware counsel to Hispanic Broadcasting and the HBC Trusts. The validity of
the securities will be passed upon for the underwriters, dealers or agents, if
any, by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The consolidated financial statements and financial statement schedule of
Hispanic Broadcasting Corporation and subsidiaries as of and for the years ended
December 31, 1998 and 1997 incorporated by reference herein and elsewhere in the
registration statement have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein and upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Hispanic Broadcasting Corporation
for the three months ended December 31, 1996 and the year ended September 30,
1996 appearing in Hispanic Broadcasting Corporation's Annual Report (Form 10-K)
for the year ended December 31, 1998 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
The financial statements of Multicultural Radio Broadcasting, Inc. for the
year ended December 31, 1997 included in the Current Report on Form 8-K/A of
Hispanic Broadcasting Corporation filed July 31, 1998 and incorporated by
reference herein have been incorporated by reference herein in reliance upon the
report of Wiss & Company, LLP, independent auditors, and upon the authority of
said firm as experts in accounting auditing.
39
<PAGE>
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- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY HISPANIC BROADCASTING OR ANY
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Where You Can Find More Information... 2
About this Prospectus................. 3
Hispanic Broadcasting Corporation..... 4
The HBC Trusts........................ 4
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends........................... 5
Use of Proceeds....................... 5
Holding Company Structure............. 6
General Description of Securities and
Risk Factors........................ 6
Description of Debt Securities Other
Than Junior Subordinated Debt
Securities.......................... 6
Description of Junior Subordinated
Debt Securities..................... 17
Description of Preferred Stock........ 28
Description of Common Stock........... 29
Description of Warrants............... 31
Description of Stock Purchase
Contracts and Stock Purchase
Units............................... 34
Description of Preferred Securities... 35
Description of Guarantees............. 37
Erisa Matters......................... 41
Plan of Distribution.................. 42
Legal Opinions........................ 44
Experts............................... 44
</TABLE>
$1,500,000,000
[LOGO]
HISPANIC BROADCASTING
CORPORATION
HBC CAPITAL TRUST I
HBC CAPITAL TRUST II
---------------------
PROSPECTUS
---------------------
, 1999
- -------------------------------------------
- -------------------------------------------
<PAGE>
SUBJECT TO COMPLETION OCTOBER 18, 1999
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
525,000 SHARES
HISPANIC BROADCASTING CORPORATION
(FORMERLY HEFTEL BROADCASTING CORPORATION)
CLASS A COMMON STOCK
------------------
Our Class A common stock trades on the Nasdaq National Market under the
symbol "HBCCA." On October 15, 1999, the last reported sale price of the
Class A common stock on the Nasdaq National Market was $82.3125 per share.
These shares of Class A common stock are being sold by the stockholders
listed under the heading "Selling Stockholders." We will not receive any of the
proceeds from the sales of the shares by the selling stockholders.
- --------------------------------------------------------------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS TO READ ABOUT CERTAIN
FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF OUR CLASS A COMMON STOCK.
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED ANY OF THE SECURITIES OFFERED BY THIS PROSPECTUS OR
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Concurrently with the filing of this prospectus, we are filing a prospectus
under Rule 415 of the Securities Act of 1933, offering up to $1.5 billion
aggregate principal amount of its Class A common stock, preferred stock, debt
securities, junior subordinated debt securities, warrants, stock purchase
contracts, stock purchase units, preferred securities of HBC Capital Trust I and
HBC Capital Trust II, and guarantees by Hispanic Broadcasting of such preferred
securities. Sales by the selling stockholders under this prospectus are not
contingent upon the completion of any sales of securities by Hispanic
Broadcasting or the HBC Trusts.
THE DATE OF THIS PROSPECTUS IS , 1999
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Hispanic Broadcasting files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements, or other information Hispanic
Broadcasting files with the SEC at its public reference rooms in Washington,
D.C. (450 Fifth Street, N.W. 20549), New York, New York (7 World Trade Center,
Suite 1300 10048) and Chicago, Illinois (500 West Madison Street, Suite 1400
60661). Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Hispanic Broadcasting's filings are also available to
the public on the internet, through a database maintained by the SEC at
HTTP://WWW.SEC.GOV. In addition, you can inspect and copy reports, proxy
statements and other information concerning Hispanic Broadcasting at the offices
of the Nasdaq National Market, Report Section, 1735 K Street, N.W., Washington,
D.C. 20006, on which Hispanic Broadcasting's Class A common stock (symbol:
"HBCCA") is listed. Please note that Hispanic Broadcasting recently changed its
name from Heftel Broadcasting Corporation to Hispanic Broadcasting Corporation
and that certain of Hispanic Broadcasting's reports, statements, or other
information incorporated by reference into this prospectus were filed under the
old name.
We filed a registration statement on Form S-3 to register with the SEC the
shares offered by this prospectus. This prospectus is part of that registration
statement. As permitted by SEC rules, this prospectus does not contain all the
information contained in the registration statement or the exhibits to the
registration statement. You may refer to the registration statement and
accompanying exhibits for more information about us and our stock.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them. This means that we can disclose important
business, financial and other information to you by referring you to other
documents separately filed with the SEC. All information incorporated by
reference is part of this prospectus, unless and until that information is
updated and superseded by the information contained in this prospectus or any
information incorporated later.
We incorporate by reference the documents listed below:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
4. Current Report on Form 8-K filed on October 15, 1999.
5. Current Report on Form 8-K filed on October 7, 1999.
6. Current Report on Form 8-K filed on May 28, 1999.
7. Current Report on Form 8-K filed on May 13, 1999.
8. Current Report on Form 8-K filed on April 20, 1999.
9. Current Report on Form 8-K filed on June 4, 1998, as amended by
Form 8-K/A filed on July 31, 1998.
We also incorporate by reference all future filings we make with the SEC
between the date of this prospectus and the date upon which we sell all the
securities we offer with this prospectus.
You may obtain copies of these documents at no cost by requesting them from
us in writing at the following address: Corporate Secretary, Hispanic
Broadcasting Corporation, 3102 Oak Lawn Ave., Suite 215, Dallas, Texas 75219
(telephone(214) 525-7700).
2
<PAGE>
HISPANIC BROADCASTING CORPORATION
We are one of the largest Spanish language radio broadcasting companies in
the United States and currently own or program radio stations in many of the
largest Hispanic markets in the United States, including Los Angeles, New York,
Miami, Chicago, San Francisco/San Jose, Dallas/Fort Worth, Houston, San Antonio,
McAllen/Brownsville/Harlingen, and El Paso. We recently changed our name from
Heftel Broadcasting Corporation to Hispanic Broadcasting Corporation.
Our strategy is to own and program top performing radio stations,
principally in the largest Spanish language radio markets in the United States.
We intend to acquire or develop additional Spanish language stations in leading
Hispanic markets.
We frequently evaluate strategic opportunities both within and outside our
existing line of business which closely relate to serving the Hispanic market,
including opportunities outside of the United States. We expect to pursue
additional acquisitions from time to time and may decide to dispose of certain
businesses. Such acquisitions or dispositions could be material.
Our principal executive offices are located at 3102 Oak Lawn Ave., Suite
215, Dallas, Texas 75219 (telephone: (214) 525-7700).
USE OF PROCEEDS
Hispanic Broadcasting will not receive any proceeds from the sale of the
Class A common stock by the selling stockholders.
RISK FACTORS
You should carefully consider the following risk factors in evaluating an
investment in our Class A common stock.
CONCENTRATION OF CASH FLOW FROM LOS ANGELES STATIONS
A significant decline in the revenue of our Los Angeles stations could have
a material adverse effect on our financial performance. Broadcast cash flow
generated by our Los Angeles stations accounts for a large percentage of our
broadcast cash flow. Increased competition for advertising dollars with other
radio stations and communications media in the Los Angeles metropolitan area,
both generally and relative to the broadcasting industry, increased competition
from a new format competitor and other competitive and economic factors could
cause a decline in revenue from our Los Angeles stations.
OUR RELATIONSHIP WITH CLEAR CHANNEL
OWNERSHIP OF CLASS B COMMON STOCK. Clear Channel Communications, Inc.
currently does not own shares of Class A common stock and therefore is not be
entitled to vote in the election of our directors. However, Clear Channel does
own all of the outstanding shares of our Class B common stock, which has a class
vote on certain matters, including
- the sale of all or substantially all of our assets;
- any merger or consolidation where our stockholders immediately prior to
the transaction would not own at least 50% of the capital stock of the
surviving entity;
- our reclassification, capitalization, dissolution or liquidation;
- our issuance of any shares of preferred stock;
3
<PAGE>
- the amendment of our certificate of incorporation in a manner that
adversely affects the rights of the holders of the Class B common stock;
- the declaration or payment of any non-cash dividends on any class of our
common stock; or
- any amendment to our certificate of incorporation concerning our capital
stock.
Shares of Class B common stock are convertible into shares of Class A common
stock, subject to any necessary regulatory approvals. These provisions could
have the effect of delaying or preventing a change in control of us, which could
deprive our stockholders of the opportunity to receive a premium for their
shares. These provisions could also have the effect of making us less attractive
to a potential acquirer and could result in holders of Class A common stock
receiving less consideration upon a sale of their shares than might otherwise be
available in the event of a takeover attempt.
SALES BY CLEAR CHANNEL. Clear Channel owns a significant percentage of our
common stock. Any sales of our stock by Clear Channel could have a material
adverse effect on our stock price.
POTENTIAL CONFLICTS OF INTEREST. The nature of the respective businesses of
us and Clear Channel gives rise to potential conflicts of interest between us.
We are each engaged in the radio broadcasting business in numerous markets, and
as a result, in overlapping markets we compete with each other for advertising
revenues. Clear Channel's television and outdoor advertising operations also
compete with us for advertising dollars in overlapping markets. In addition,
conflicts could arise with respect to transactions involving the purchase or
sale of radio broadcasting companies, particularly Spanish language radio
broadcasting companies, the issuance of additional shares of common stock, or
the payment of dividends by us. For instance, Clear Channel currently owns a 40%
equity interest in Grupo Acir Communicaciones, S.A. de C.V., one of the largest
radio broadcasters in Mexico.
Clear Channel has advised us that it does not currently intend to engage in
the domestic Spanish language radio broadcasting business, other than through
its ownership of our shares. However, circumstances could arise that would cause
Clear Channel to engage in the Spanish language broadcasting business. For
example, opportunities could arise which would require greater financial
resources than those available to us or which are located in areas in which we
do not intend to operate. Thus, although Clear Channel has stated to us that it
has no current intention to do so, it may in the future engage in the domestic
Spanish language broadcasting business. In addition, Clear Channel may from time
to time acquire domestic Spanish language radio broadcasting companies
individually or as part of a larger group and may thereafter engage in the
Spanish language radio broadcasting business. Such activities could directly or
indirectly compete with our business and could adversely affect us.
CONTROL BY THE TICHENOR FAMILY
As of June 30, 1999, McHenry Tichenor, Jr., Hispanic Broadcasting's Chief
Executive Officer, and certain members of his family have voting control over
approximately 19.1% of the shares of our Class A common stock. These shares are
subject to a voting agreement. This enables the Tichenor family to exert
significant influence in electing our board of directors and over other
management decisions.
EXTENSIVE GOVERNMENT REGULATION OF BROADCASTING MAY LIMIT OUR OPERATIONS
BROADCASTING. The federal government extensively regulates the domestic
broadcasting industry, and any changes in the current regulatory scheme could
significantly affect us. All issuances, renewals, assignments and transfers of
control of broadcasting station operating licenses require the approval of the
Federal Communications Commission. In addition, the federal communications laws
limit the number of broadcasting properties we may own in a particular area.
While the Telecommunications Act of 1996 relaxed the FCC's multiple ownership
limits and created significant new opportunities for broadcasting companies, it
also created uncertainty about how the FCC would implement these laws.
4
<PAGE>
For example, the FCC is considering changes to its "one-to-a-market" rule and
other policies and rules that could affect the application of the local radio
ownership limits. Under the "one-to-a-market" rule, a party may not have
interests in radio stations and a television station in the same market unless
the FCC grants a waiver.
The FCC has also been more aggressive in independently examining issues of
market concentration when considering radio station acquisitions. The FCC has
delayed its approval of several pending radio station purchases by various
parties because of market concentration concerns. Moreover, in recent months the
FCC has followed an informal policy of giving specific public notice of its
intention to conduct additional ownership concentration analysis and soliciting
public comment on the issue of concentration and its effect on competition and
diversity with respect to certain applications for consent to radio station
acquisitions.
Our broadcasting business will depend upon maintaining broadcasting licenses
issued by the FCC. The FCC issues these licenses for a maximum term of eight
years. Although the FCC rarely denies a renewal application, the FCC may not
approve our future renewal applications or may impose conditions on such
renewals that could adversely affect our operations. Moreover, governmental
regulations and policies may change over time, and these changes may have a
material impact upon us.
ANTITRUST. Additional acquisitions by us of radio stations will require
antitrust review by the federal antitrust agencies. Following the passage of the
Telecommunications Act of 1996, the Justice Department has become more
aggressive in reviewing proposed acquisitions of radio stations, particularly in
instances where the proposed acquiror already owns one or more radio station
properties in a particular market and seeks to acquire another radio station in
the same market. The Justice Department has, in some cases, obtained consent
decrees requiring radio station divestitures in a particular market based on
allegations that acquisitions would lead to unacceptable concentration levels.
We can give no assurances that the Justice Department or the Federal Trade
Commission will not seek to bar us from acquiring additional radio stations in
any market where we already have a significant share of the Hispanic radio
audience.
ENVIRONMENTAL. As the owner or operator of various real properties and
facilities, we must comply with various federal, state and local environmental
laws and regulations. While in the past we have not incurred significant
expenditures to comply with these laws, additional environmental laws passed in
the future or a finding of a violation of existing laws could require us to make
significant expenditures.
OUR ACQUISITION STRATEGY COULD POSE RISKS
OPERATIONAL RISKS. We intend to grow through the acquisition of radio
stations and other assets that we believe will complement our existing portfolio
or help us enter new markets where we do not have a presence. Our acquisition
strategy involves numerous risks, including:
- certain of such acquisitions may prove unprofitable and fail to generate
anticipated cash flows;
- to successfully manage a portfolio of radio broadcasting properties, we
may need to recruit additional senior management and expand corporate
infrastructure;
- we may encounter difficulties in the integration of operations and
systems;
- management's attention may be diverted from other business concerns; and
- we may lose key employees of acquired companies or stations.
We frequently evaluate strategic opportunities both within and outside our
existing lines of business. We expect from time to time to pursue additional
acquisitions and may decide to dispose of certain businesses. Such acquisitions
or dispositions could be material.
5
<PAGE>
CAPITAL REQUIREMENTS NECESSARY FOR ADDITIONAL ACQUISITIONS. We face stiff
competition from other radio broadcasting companies for acquisition
opportunities. If the prices sought by sellers of these companies continue to
rise, we may find fewer acceptable acquisition opportunities. In addition, the
purchase price of possible acquisitions could be so large as to require
additional debt or equity financing. We can give no assurance that we will
obtain the needed financing or that we will obtain such financing on attractive
terms. Additional indebtedness would increase our leverage and make us more
vulnerable to economic downturns and may limit our ability to withstand
competitive pressures. Additional equity financing would result in dilution to
our stockholders. We may not have sufficient capital resources to complete
acquisitions.
WE MUST SUCCESSFULLY IMPLEMENT OUR STRATEGY TO CONVERT STATIONS TO A SPANISH
BROADCASTING FORMAT.
Part of our strategy is to acquire radio stations with an English language
format and convert these stations to a Spanish language format. This strategy
requires a heavy initial investment of both financial and management resources.
We typically incur losses for a period of time after a format change because of
the time required to build up ratings and station loyalty. We can give no
assurance that this strategy will be successful in any given market,
notwithstanding that we may incur substantial costs in implementing this part of
our strategy.
WE FACE INTENSE COMPETITION
Broadcasting is a highly competitive business. We may not be able to
maintain or increase our current audience ratings and advertising revenues. Our
broadcasting properties compete for audiences and advertising revenues with
other radio stations, television stations and outdoor advertising companies, as
well as with other media, such as newspapers, magazines, cable television, and
direct mail, within their respective markets. Audience ratings and market shares
are subject to change, which could have an adverse effect on our revenues in
that market. Other variables that could affect our financial performance
include:
- economic conditions, both general and relative to the broadcasting
industry;
- shifts in population and other demographics;
- the level of competition for advertising dollars;
- fluctuations in operating costs;
- technological changes and innovations;
- changes in labor conditions; and
- changes in governmental regulations and policies and actions of federal
regulatory bodies.
NEW TECHNOLOGIES MAY AFFECT OUR BROADCASTING OPERATIONS
We are unable to predict the effect new technologies will have on our
broadcasting operations, but the capital expenditures necessary to implement
such technologies could be substantial. The FCC is considering ways to introduce
new technologies to the radio broadcast industry, including satellite and
terrestrial delivery of digital audio broadcasting and the standardization of
available technologies which significantly enhance the sound quality of AM
broadcasts.
OUR SYSTEMS MUST BE YEAR 2000 COMPLIANT
We are exposed to the risk that the year 2000 issue could cause system
failures or miscalculations in our broadcast locations which could cause
disruptions of our operations, including, among other things, a temporary
inability to produce broadcast signals, process financial transactions or engage
in
6
<PAGE>
similar normal business activities. As a result, we have determined that we will
be required to modify or replace portions of our software and certain hardware
so that those systems will properly recognize dates beyond December 31, 1999. We
presently believe that with modifications or replacements of existing software
and certain hardware, the year 2000 issue can be mitigated. To date, the amounts
incurred and expensed for developing and carrying out the plans to complete the
year 2000 modifications have not had a material effect on our operations. We
substantially completed the year 2000 modifications, including testing, by
September 30, 1999. The total remaining cost for addressing the year 2000 issue
is not expected to be material to our operations. If such modifications and
replacements are not made, or are not completed on time, the year 2000 issue
could have a material impact on our operations.
In addition, the possibility of interruption exists in the event that the
information systems of our significant vendors are not year 2000 compliant. The
inability of our vendors to complete their year 2000 resolution process in a
timely fashion could materially impact us. The effect of non-compliance by such
vendors is not determinable. In addition, disruptions in the economy generally
resulting from the year 2000 issues could also materially adversely affect us.
We could be subject to litigation for computer systems failure, for example,
equipment shutdown or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
SELLING STOCKHOLDERS
The following table lists the names of the selling stockholders, the number
of shares of Class A common stock beneficially owned by each selling stockholder
on September 30, 1999, and the number of shares, which may be offered for sale
by this prospectus. Each selling stockholder provided to us the information
regarding its share ownership. Because the selling stockholders may offer all,
some or none of their Class A common stock, we can not give a definitive
estimate as to the number of shares that will be held by the selling
stockholders after the offering and we prepared the following table based on the
assumption that the selling stockholders sell all of the shares of Class A
common stock covered by this prospectus. At September 30, 1999, there were
37,193,488 shares of Class A common stock outstanding.
<TABLE>
<CAPTION>
SHARES SHARES BENEFICIALLY OWNED
AFTER THE OFFERING
-------------------------
BENEFICIALLY OWNED SHARES BEING PERCENT OF
SELLING STOCKHOLDER PRIOR TO OFFERING OFFERED NUMBER OUTSTANDING
- ------------------- ------------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
McHenry T. Tichenor (1)(2)................. 116,642 50,000 66,642 *
The David T. Tichenor Trust (1)(3)......... 613,568 240,000 373,568 1.0%
William E. Tichenor (1)(4)................. 890,723 125,000 765,723 2.1%
Jean T. Tichenor (1)(5).................... 1,528,916 60,000 1,468,916 3.9%
David Lykes (6)............................ 253,052 50,000 203,052 *
</TABLE>
- ------------------------
* Represents less than 1.0%
(1) Shares held subject to a voting agreement pursuant to which the selling
stockholder shares voting control with other members of the Tichenor family.
(2) McHenry T. Tichenor is a director of Hispanic Broadcasting and is the father
of Mr. Tichenor, Jr.
(3) David T. Tichenor is the beneficiary of the David T. Tichenor Trust. David
T. Tichenor is the step-brother of Mr. Tichenor, Jr.
(4) William E. Tichenor is the brother of Mr. Tichenor, Jr.
(5) Ms. Tichenor is the sister of Mr. Tichenor, Jr.
(6) Mr. Lykes serves as Executive Vice President and Chief Operating Officer of
Hispanic Broadcasting.
7
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The board of directors has the authority to issue up to 100,000,000 shares
of Class A common stock, $.001 par value per share, 50,000,000 shares of
Class B common stock, $.001 par value per share, and 5,000,000 shares of
preferred stock, $.001 par value. As of September 30, 1999, 37,193,488 shares of
Class A common stock were outstanding, 14,156,470 shares of Class B common stock
were outstanding, and no shares of preferred stock were outstanding.
COMMON STOCK
Class A and Class B common stock have identical rights except for voting
rights and certain rights of the Class B common stockholders to convert their
shares into Class A common stock. In the event that our board of directors
declares dividends out of legally available funds, holders of Class A and
Class B common stock are entitled to ratably receive such dividends, subject to
the payment of any preferential dividends with respect to any preferred stock
outstanding at such time. In the event of our liquidation, dissolution or
winding up, holders of Class A and Class B common stock are entitled to share
ratably in any assets available for distribution to stockholders after payment
of all obligations of the company, subject to the payment of any preferential
distributions with respect to any preferred stock outstanding at such time.
Holders of Class A and Class B common stock do not have cumulative voting
rights or preemptive or other rights to acquire or subscribe to additional,
unissued or treasury shares.
CLASS A COMMON STOCK
Holders of the Class A common stock are entitled to one vote per share on
all matters submitted to a vote of the stockholders.
CLASS B COMMON STOCK
Holders of the Class B common stock have voting rights limited to certain
specified decisions and actions. Specifically, the holders of a majority of the
Class B common stock voting as a single class must grant approval or consent
before Hispanic Broadcasting can take any of the following actions:
- sell, lease or otherwise transfer all or substantially all of our assets;
- effect any merger or consolidation where our stockholders immediately
before such merger or consolidation would not own at least 50% of the
capital stock of the surviving entity;
- effect any reclassification, recapitalization, dissolution, liquidation or
winding up;
- authorize, issue or obligate ourself to issue any shares of preferred
stock;
- make or permit any amendment to the certificate of incorporation that
adversely affects the rights of the holders of our Class B common stock;
- declare or pay any non-cash dividends on or make any other non-cash
distribution on any class of common stock; or
- make or permit any amendment or modification to the certificate of
incorporation concerning any of our capital stock.
With respect to each of these matters, each share of Class B common stock is
entitled to one vote. These class voting rights will end once Clear Channel and
its affiliates own less than 20% of all of our outstanding Class A and Class B
common stock.
Only Clear Channel and its affiliates may own shares of Class B common
stock. The outstanding Class B common stock will convert into Class A common
stock automatically upon sale, gift or other
8
<PAGE>
transfer to a person or entity other than Clear Channel or an affiliate of Clear
Channel. Each holder of Class B common stock has the option to convert its
Class B common stock into Class A common stock upon receipt of all required
regulatory consents. In addition, Clear Channel has the option to convert any of
its shares of Class A common stock that it may own from time to time into shares
of Class B common stock.
PREFERRED STOCK
Upon obtaining the consent of the holders of Class B common stock as
described in "Description of Common Stock--Class B Common Stock," the Hispanic
Broadcasting board of directors has the authority to issue shares of preferred
stock in one or more series. At the time of such issuance, the board can
designate the rights, preferences, privileges, and qualifications of such
preferred stock without any further vote or action by the stockholders. A future
issuance of preferred stock could have one or all of the following effects:
- decrease the amount of earnings and assets available for distribution to
holders of Class A and Class B common stock;
- adversely affect the rights and powers, including voting rights, of
holders of Class A and Class B common stock; and
- delay, defer or prevent a change in control of the company.
REGISTRATION RIGHTS AGREEMENTS; STOCKHOLDERS AGREEMENT; VOTING AGREEMENT
Hispanic Broadcasting completed a merger with Tichenor Media System, Inc. on
February 14, 1997. At the time of this merger, Hispanic Broadcasting entered
into a registration rights agreement with Clear Channel and with certain former
Tichenor stockholders. As a result of these agreements, Hispanic Broadcasting
may be required to file registration statements with the SEC to register for
resale shares of Class A common stock received by each of these parties.
At the time of our merger with Tichenor Media System, Inc., Hispanic
Broadcasting also entered into a stockholders agreement with Clear Channel and
certain former Tichenor stockholders in order to impose certain restrictions on
the transferability of their shares, to grant certain rights of first refusal
and to address the rights of the parties in the event of future sales of our
common stock.
CERTAIN ANTI-TAKEOVER EFFECTS OF CHARTER AND DELAWARE LAW
The voting rights of the Class B stockholders and certain provisions of the
Delaware General Corporation Law may each have the effect of impeding tender
offers, proxy fights, open market purchases or other events which could effect a
change in control of Hispanic.
Our certificate of incorporation grants holders of Class B common stock the
right to vote separately as a class on certain matters, including a merger or
sale of all or substantially all of our assets. In addition, holders of Class B
common stock have the option to convert their shares into Class A common stock
upon receipt of required regulatory approvals. Thus, Clear Channel and its
affiliates, as the sole owners of Class B common stock, can exert a significant
influence on our change in control.
The Delaware General Corporation Law restricts a wide range of transactions
between a corporation and any of its interested stockholders. Under Delaware
law, an interested stockholder generally means any stockholder who beneficially
owns, directly or indirectly, 15% or more of the corporation's outstanding
voting stock. For a period of three years from the time a stockholder becomes an
interested stockholder, such stockholder cannot:
- enter into a merger or consolidation with the corporation,
9
<PAGE>
- acquire more than 10% of the corporation's assets,
- engage in certain transactions which would increase the proportionate
share of stock owned by such stockholder, or
- disproportionately benefit from any loans, advances or other financial
benefits from the corporation.
However, these restrictions do not apply to an interested stockholder who
owned at least 85% of the corporation's voting stock at the time it initially
became an interested stockholder. Furthermore, the restrictions do not apply if:
- before such person became an interested stockholder, the board of
directors approved either the transaction proposed by the interested
stockholder or the transaction which resulted in the person becoming an
interested stockholder; or
- the business combination is approved by the board of directors and
authorized by the affirmative vote of at least 66 2/3% of the outstanding
voting stock not owned by the interested stockholder.
FOREIGN OWNERSHIP
The Federal Communications Act and certain rules established by the FCC
impose certain restrictions on foreign ownership of and voting control over our
capital stock. Accordingly, our certificate of incorporation prohibits aliens,
foreign governments, or non-U.S. corporations from directly or indirectly owning
or acquiring voting control of more than 25% of our outstanding capital stock.
It also prohibits any transfer of our capital stock which would result in a
violation of this prohibition and authorizes our board of directors to adopt
such provisions as it deems necessary to enforce these prohibitions.
10
<PAGE>
PLAN OF DISTRIBUTION
This prospectus covers the resale of shares of common stock by the selling
stockholders and their pledgees, donees, assignees and other successors in
interest. The selling stockholders may sell their shares on the Nasdaq National
Market, in the over-the-counter market or through any other facility on which
the shares are traded, or in private transactions. These sales may be at market
prices or at negotiated prices. The selling stockholders may use the following
methods when selling shares:
- ordinary brokerage transactions and transactions in which the broker or
dealer solicits purchasers;
- block trades in which the broker or dealer attempts to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
- privately negotiated transactions;
- any combination of these methods of sale; or
- any other legal method.
The selling stockholders may engage in short sales of the common stock and
deliver shares to close out their short positions. The selling stockholders may
also enter into put or call options or other transactions with broker-dealers or
others which require delivery to those persons of shares covered by this
prospectus.
Brokers, dealers or other agents participating in the distribution of the
shares of common stock may receive compensation in the form of discounts or
commissions from the selling stockholders, as well as the purchaser if they act
as agent for the purchaser. The discount or commission in a particular
transaction could be more than the customary amount. We know of no existing
arrangements between any selling stockholder and any underwriter, broker, dealer
or agent relating to the sale or distribution of the shares.
The selling stockholders and any brokers or dealers that participate in the
sale of the shares may be deemed to be "underwriters" within the meaning of the
Securities Act. Any discounts, commissions or other compensation received by
these persons and any profit on the resale of the shares by them as principals
might be deemed to be underwriters' compensation. The selling stockholders may
agree to indemnify any broker, dealer or agent that participates in the sale of
the shares against various liabilities, including liabilities under the
Securities Act.
At the time a particular offer of shares is made, to the extent required we
will file a supplement to this prospectus which identifies the number of shares
being offered, the name of the selling stockholder, the name of any
participating broker or dealer, the amount of discounts and commissions, and any
other material information.
The selling stockholders and any other person participating in a
distribution will be subject to the applicable provisions of the Exchange Act
and its rules and regulations. For example, the anti-manipulative provisions of
Regulation M may limit the ability of the selling stockholders or others to
engage in stabilizing and other market making activities.
The selling stockholders may also sell their shares pursuant to Rule 144
under the Securities Act, rather than pursuant to this prospectus, so long as
they meet the criteria and conform to the requirements of the rule.
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders. We will pay the registration and other offering expenses
related to this offering, but the selling stockholders
11
<PAGE>
will pay all underwriting discounts and brokerage commissions incurred in
connection with the offering. We have agreed to indemnify the selling
stockholders against various liabilities, including liabilities under the
Securities Act.
In order to comply with some states' securities laws, if applicable, the
shares will be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states the shares may not be sold unless they
have been registered or qualified for sale or an exemption from registration or
qualification is available and is satisfied.
LEGAL OPINIONS
The validity of the securities will be passed upon for Hispanic Broadcasting
by its special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P., San Antonio,
Texas.
EXPERTS
The consolidated financial statements and financial statement schedule of
Hispanic Broadcasting Corporation and subsidiaries as of and for the years ended
December 31, 1998 and 1997 incorporated by reference herein and elsewhere in the
registration statement have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein and upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Hispanic Broadcasting Corporation
for the three months ended December 31, 1996 and the year ended September 30,
1996 appearing in Hispanic Broadcasting Corporation's Annual Report (Form 10-K)
for the year ended December 31, 1998 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
The financial statements of Multicultural Radio Broadcasting, Inc. for the
year ended December 31, 1997 included in the Current Report on Form 8-K/A of
Hispanic Broadcasting Corporation filed July 31, 1998 and incorporated by
reference herein have been incorporated by reference herein in reliance upon the
report of Wiss & Company, LLP, independent auditors, and upon the authority of
said firm as experts in accounting auditing.
12
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY HISPANIC BROADCASTING OR ANY
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Where You Can Find More Information... 2
Hispanic Broadcasting Corporation..... 3
Use of Proceeds....................... 3
Risk Factors.......................... 3
Selling Stockholders.................. 8
Description of Capital Stock.......... 9
Plan of Distribution.................. 12
Legal Opinions........................ 13
Experts............................... 13
</TABLE>
525,000 SHARES
[LOGO]
HISPANIC BROADCASTING
CORPORATION
---------------------
PROSPECTUS
---------------------
, 1999
- -------------------------------------------
- -------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses (other than underwriting discounts and commissions)
in connection with the issuance and distribution of the Securities registered
hereby are as follows:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 387,345
Trustee's fees and expenses................................. 50,000
Rating Agency fees.......................................... 150,000
Legal fees and expenses..................................... 250,000
Accounting fees and expenses................................ 100,000
Printing and engraving expenses............................. 200,000
Miscellaneous............................................... 112,655
----------
Total............................................... $1,250,000
</TABLE>
The foregoing expenses will be paid by the registrants.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF HISPANIC BROADCASTING.
Pursuant to provisions of the Delaware General Corporation Law, the Restated
Certificate of Incorporation of Hispanic Broadcasting includes a provision which
eliminates the personal liability of its directors to the Company and its
stockholders for monetary damage to the fullest extent permissible under
Delaware law. This provision does not eliminate liability (a) for any breach of
a director's duty of loyalty to the Company or its stockholders; (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (c) in connection with payment of any illegal dividend or an
illegal stock repurchase; or (d) for any transaction from which the director
derives an improper personal benefit. Further, this provision has no effect on
claims arising under federal or state securities laws and does not affect the
availability of injunctions and other equitable remedies available to the
Company's stockholders for any violation of a director's fiduciary duty to the
Company or its stockholders.
The Company's Certificate of Incorporation authorizes the Company to
indemnify its officers, directors and other agents to the fullest extent
permitted by Delaware law, exclusive of rights provided through bylaw
provisions, agreements, vote of stockholders or disinterested directors or
otherwise. The Company's Restated Certificate of Incorporation also authorizes
the Company to indemnify its officers, directors and agents for breach of duty
to the corporation and its stockholders through bylaw provisions, agreements or
both, in excess of the indemnification otherwise permitted under Delaware law,
subject to certain limitations. The Company has entered into indemnification
agreements with all of its directors and executive officers whereby the Company
will indemnify each such person (an "indemnitee") against certain claims arising
out of certain past, present or future acts, omissions or breaches of duty
committed by an indemnitee while serving in his employment capacity. Such
indemnification does not apply to acts or omissions which are knowingly
fraudulent, deliberately dishonest or arise from willful misconduct.
Indemnification will only be provided to the extent the indemnitee has not
already received payments in respect of such claim from the Company or from an
insurance company. Under certain circumstances, such indemnification (including
reimbursement of expenses incurred) will be allowed for liability arising under
the Securities Act of 1933.
The Bylaws of the Company require the Company to provide indemnification for
directors and officers to the fullest extent permitted under Delaware law and
the Company's Certificate of Incorporation.
II-1
<PAGE>
An insurance policy obtained by Hispanic Broadcasting provides for
indemnification of officers and directors of Hispanic Broadcasting and certain
other persons against liabilities and expenses incurred by any of them in
certain stated proceedings and under certain stated conditions.
INDEMNIFICATION OF TRUSTEES OF THE HBC TRUSTS.
Each Declaration pursuant to which each HBC Trust is organized will provide
that no Regular Trustee, or affiliate of any Regular Trustee, or officer,
director, stockholder, member, partner, employee, representative or agent of any
Regular Trustee or of any such affiliate, or employee or agent of the applicable
HBC Trust or its affiliates (each an "Indemnified Person") shall be liable,
responsible or accountable in damages or otherwise to such HBC Trust or any
employee or agent of such HBC Trust or its affiliates for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of such HBC Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by such Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such act or omission. Each Declaration also
provides that to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the applicable HBC Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such act or omission. Each Declaration further provides that, to
the fullest extent permitted by applicable law, expenses (including legal fees)
incurred by an Indemnified Person in defending any claim, demand, action, suit
or proceeding shall, from time to time, be advanced by the Company prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
of an undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified for the underlying cause of action as authorized by such
Declaration.
ITEM 16. EXHIBITS
EXHIBITS.
<TABLE>
<C> <S>
1.1* -- Form of Underwriting Agreement (Equity).
1.2* -- Form of Underwriting Agreement (Non-Equity).
3.1 -- Second Amended and Restated Certificate of Incorporation
of Hispanic Broadcasting dated February 14, 1997
(incorporated by reference to Exhibit 3.1 to Hispanic
Broadcasting's Form 8-K filed March 3, 1997).
3.2 -- Bylaws of Hispanic Broadcasting (incorporated by
reference to Hispanic Broadcasting's Registration
Statement on Form S-1, as amended (Reg. No. 33-78370)).
3.3 -- Certificate of Amendment to the Second Amended and
Restated Certificate of Incorporation of Hispanic
Broadcasting (incorporated by reference to Hispanic
Broadcasting's Quarterly Report on Form 10-Q filed
November 12, 1998).
3.4 -- Certificate of Amendment to the Second Amended and
Restated Certificate of Incorporation of Hispanic
Broadcasting (incorporated by reference to Hispanic
Broadcasting's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999).
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
4.1* -- Form of Senior Indenture.
4.2* -- Form of Senior Debt Security (included in Form of Senior
Indenture filed as Exhibit 4.1).
4.3* -- Form of Subordinated Indenture.
4.4* -- Form of Subordinated Debt Security (included in Form of
Subordinated Indenture filed as Exhibit 4.3).
4.5* -- Form of Junior Subordinated Indenture.
4.6* -- Form of Junior Subordinated Debt Security (included in
Form of Junior Subordinated Indenture filed as Exhibit
4.5).
4.7* -- Form of Preferred Securities Certificate (included in
Forms of Amended and Restated Declaration of HBC Capital
Trusts I and II, filed as Exhibits 4.14 and 4.15,
respectively).
4.8* -- Form of Warrant Agreement.
4.9* -- Form of Standard Stock Warrant Agreement Provisions.
4.10* -- Certificate of Trust of HBC Capital Trust I.
4.11* -- Certificate of Trust of HBC Capital Trust II.
4.12* -- Declaration of HBC Capital Trust I.
4.13* -- Declaration of HBC Capital Trust II.
4.14* -- Form of Amended and Restated Declaration of HBC Capital
Trust I.
4.15* -- Form of Amended and Restated Declaration of HBC Capital
Trust II.
4.16* -- Form of Pledge Agreement.
4.17* -- Form of Deposit Agreement.
4.18* -- Form of Stock Purchase Contract.
4.19* -- Form of Guarantee of HBC Capital Trust I.
4.20* -- Form of Guarantee of HBC Capital Trust II.
4.21 -- Credit Agreement dated February 14, 1997, by and among
Hispanic Broadcasting, certain subsidiaries of Hispanic
Broadcasting, The Chase Manhattan Bank, as Administrative
Agent, and certain other lenders signatory thereto
(incorporated by reference to the exhibits to Hispanic
Broadcasting's Form 8-K filed on March 3, 1997).
4.22 -- Specimen certificate for the Class A common stock
(incorporated by reference to the exhibits to Hispanic
Broadcasting's Form S-1, as amended (Reg. No. 33-78370)).
5.1 -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
special counsel for Hispanic Broadcasting, regarding the
Senior debt securities, the Subordinated debt securities,
the preferred stock, the common stock, the Warrants, the
stock purchase contracts, and the stock purchase units.
5.2 -- Opinion of Morris, Nichols, Arsht & Tunnell, special
Delaware counsel for Hispanic Broadcasting and the HBC
Trusts, regarding the preferred securities.
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
12.2 -- Computation of Ratio of Earnings to Fixed Charges and
preferred stock Dividends
23.1 -- Consent of Ernst & Young LLP.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
23.2 -- Consent of KPMG LLP.
23.3 -- Consent of Wiss & Company
23.4 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in opinion filed as Exhibit 5.1).
23.5 -- Consent of Morris, Nichols, Arsht & Tunnell (included in
opinion filed as Exhibit 5.2).
24 -- Power of Attorney for Hispanic Broadcasting Corporation
(included on Signature Page).
25.1* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Senior Indenture.
25.2* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Subordinated Indenture.
25.3* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the junior subordinated
Indenture.
25.4* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Declaration of Trust of
HBC Capital Trust I.
25.5* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Declaration of Trust of
HBC Capital Trust II.
25.6* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of
Hispanic Broadcasting for the benefit of the holders of
preferred securities of the HBC Capital Trust I.
25.7* -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of
Hispanic Broadcasting for the benefit of the holders of
preferred securities of the HBC Capital Trust II.
</TABLE>
- ------------------------
* Incorporated by reference to the exhibits of Hispanic Broadcasting's
Registration Statement on Form S-3 (Reg. No. 333-42171) dated December 12,
1997.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
- to file, during any period in which offers or sales are being made of the
securities registered hereby, a post-effective amendment to this
Registration Statement
- to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
- to reflect in the Prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; provided, however, that notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
- to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the
II-4
<PAGE>
Registration Statement; provided, however, that the undertakings set forth
in clauses (i) and (ii) above do not apply if the information required to
be included in a post-effective amendment by those clauses is contained in
periodic reports filed by Hispanic Broadcasting pursuant to Section 13 or
15(d) of the Securities and Exchange Act of 1934 that are incorporated by
reference in this Registration Statement;
- that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
- to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering; and
- that, for the purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 15 above or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is therefore unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense of
any action, suit or proceeding) is asserted against the registrants by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their respective
counsels the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Hispanic
Broadcasting certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on October 15, 1999.
<TABLE>
<S> <C> <C>
HISPANIC BROADCASTING CORPORATION
BY: /S/ MCHENRY T. TICHENOR, JR.
-----------------------------------------
McHenry T. Tichenor, Jr.
CHIEF EXECUTIVE OFFICER
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of Hispanic Broadcasting Corporation hereby constitute and appoint
McHenry T. Tichenor, Jr. and Jeffrey T. Hinson, and each of them, his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and his name place and stead, in any and all capacities,
to execute any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully and to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated below.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ MCHENRY T. TICHENOR, JR. Chief Executive Officer and
------------------------------------------- Director October 15, 1999
McHenry T. Tichenor, Jr.
Senior Vice President/Chief
/s/ JEFFREY T. HINSON Financial Officer
------------------------------------------- (Principal Financial October 15, 1999
Jeffrey T. Hinson Officer)
/s/ MCHENRY T. TICHENOR Director
------------------------------------------- October 15, 1999
McHenry T. Tichenor
/s/ ROBERT W. HUGHES Director
------------------------------------------- October 15, 1999
Robert W. Hughes
/s/ JAMES M. RAINES Director
------------------------------------------- October 15, 1999
James M. Raines
/s/ ERNESTO CRUZ Director
------------------------------------------- October 15, 1999
Ernesto Cruz
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of HBC
Capital Trust I and HBC Capital Trust II certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned thereunto duly authorized, in the City of Dallas, Texas on the
15th day of October, 1999.
<TABLE>
<S> <C>
HBC CAPITAL TRUST I,
a Delaware business trust
By: HISPANIC BROADCASTING CORPORATION,
as Depositor
By: /s/ MCHENRY T. TICHENOR, JR.
---------------------------------------
McHenry T. Tichenor, Jr.
Chief Executive Officer
HBC CAPITAL TRUST II,
a Delaware business trust
By: HISPANIC BROADCASTING CORPORATION,
as Depositor
By: /s/ MCHENRY T. TICHENOR, JR.
---------------------------------------
McHenry T. Tichenor, Jr.
Chief Executive Officer
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS.
- ---------------------
<C> <S>
1.1* --Form of Underwriting Agreement (Equity).
1.2* --Form of Underwriting Agreement (Non-Equity).
3.1 --Second Amended and Restated Certificate of Incorporation
of Hispanic Broadcasting dated February 14, 1997
(incorporated by reference to Exhibit 3.1 to Hispanic
Broadcasting's Form 8-K filed March 3, 1997).
3.2 --Bylaws of Hispanic Broadcasting (incorporated by reference
to Hispanic Broadcasting's Registration Statement on
Form S-1, as amended (Reg. No. 33-78370)).
3.3 --Certificate of Amendment to the Second Amended and
Restated Certificate of Incorporation of Hispanic
Broadcasting (incorporated by reference to Hispanic
Broadcasting's Quarterly Report on Form 10-Q filed
November 12, 1998).
3.4 --Certificate of Amendment to the Second Amended and
Restated Certificate of Incorporation of Hispanic
Broadcasting (incorporated by reference to Hispanic
Broadcasting's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999).
4.1* --Form of Senior Indenture.
4.2* --Form of Senior Debt Security (included in Form of Senior
Indenture filed as Exhibit 4.1).
4.3* --Form of Subordinated Indenture.
4.4* --Form of Subordinated Debt Security (included in Form of
Subordinated Indenture filed as Exhibit 4.3).
4.5* --Form of Junior Subordinated Indenture.
4.6* --Form of Junior Subordinated Debt Security (included in
Form of Junior Subordinated Indenture filed as Exhibit
4.5).
4.7* --Form of Preferred Securities Certificate (included in
Forms of Amended and Restated Declaration of HBC Capital
Trusts I and II, filed as Exhibits 4.14 and 4.15,
respectively).
4.8* --Form of Warrant Agreement.
4.9* --Form of Standard Stock Warrant Agreement Provisions.
4.10* --Certificate of Trust of HBC Capital Trust I.
4.11* --Certificate of Trust of HBC Capital Trust II.
4.12* --Declaration of HBC Capital Trust I.
4.13* --Declaration of HBC Capital Trust II.
4.14* --Form of Amended and Restated Declaration of HBC Capital
Trust I.
4.15* --Form of Amended and Restated Declaration of HBC Capital
Trust II.
4.16* --Form of Pledge Agreement.
4.17* --Form of Deposit Agreement.
4.18* --Form of Stock Purchase Contract.
4.19* --Form of Guarantee of HBC Capital Trust I.
4.20* --Form of Guarantee of HBC Capital Trust II.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS.
- ---------------------
<C> <S>
4.21 --Credit Agreement dated February 14, 1997, by and among
Hispanic Broadcasting, certain subsidiaries of Hispanic
Broadcasting, The Chase Manhattan Bank, as Administrative
Agent, and certain other lenders signatory thereto
(incorporated by reference to the exhibits to Hispanic
Broadcasting's Form 8-K filed on March 3, 1997).
4.22 --Specimen certificate for the Class A common stock
(incorporated by reference to the exhibits to Hispanic
Broadcasting's Form S-1, as amended (Reg. No. 33-78370)).
5.1 --Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
special counsel for Hispanic Broadcasting, regarding the
Senior debt securities, the Subordinated debt securities,
the preferred stock, the common stock, the Warrants, the
stock purchase contracts, and the stock purchase units.
5.2 --Opinion of Morris, Nichols, Arsht & Tunnell, special
Delaware counsel for Hispanic Broadcasting and the HBC
Trusts, regarding the preferred securities.
12.1 --Computation of Ratio of Earnings to Fixed Charges.
12.2 --Computation of Ratio of Earnings to Fixed Charges and
preferred stock Dividends
23.1 --Consent of Ernst & Young LLP.
23.2 --Consent of KPMG LLP.
23.3 --Consent of Wiss & Company
23.4 --Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in opinion filed as Exhibit 5.1).
23.5 --Consent of Morris, Nichols, Arsht & Tunnell (included in
opinion filed as Exhibit 5.2).
24 --Power of Attorney for Hispanic Broadcasting Corporation
(included on Signature Page).
25.1* --Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Senior Indenture.
25.2* --Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Subordinated Indenture.
25.3* --Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the junior subordinated
Indenture.
25.4* Statement on Form T-1 of the eligibility of The Bank of New
York, as trustee under the Declaration of Trust of HBC
Capital Trust I.
25.5* --Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Declaration of Trust of HBC
Capital Trust II.
25.6* --Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of Hispanic
Broadcasting for the benefit of the holders of preferred
securities of the HBC Capital Trust I.
25.7* --Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of Hispanic
Broadcasting for the benefit of the holders of preferred
securities of the HBC Capital Trust II.
</TABLE>
- ------------------------
* Incorporated by reference to the exhibits of Hispanic Broadcasting's
Registration Statement on Form S-3 (Reg. No. 333-42171) dated December 12,
1997.
<PAGE>
EXHIBIT 5.1
[Akin, Gump, Strauss, Hauer & Feld Letterhead]
October 15, 1999
Hispanic Broadcasting Corporation
3102 Oak Lawn Ave., Suite 215
Dallas, Texas 75219
Ladies and Gentlemen:
We have acted as counsel to Hispanic Broadcasting Corporation, a Delaware
corporation (the "Company"), and HBC Capital Trust I and HBC Capital Trust II
(each a "Trust" and collectively the "Trusts") in connection with the filing of
a registration statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, for the registration of the sale from time to time of up to (A)
$1,500,000,000 aggregate amount of (i) unsecured senior debt securities,
unsecured subordinated debt securities and unsecured junior subordinated debt
securities of the Company (collectively, the "Debt Securities"), (ii) preferred
stock, par value $0.001 per share, of the Company (the "Preferred Stock"), (iii)
Class A Common Stock, par value $0.001 per share, of the Company (the "Class A
Common Stock"), (iv) preferred securities of the Trusts (the "Preferred
Securities"), (v) guarantees by the Company of the Preferred Securities (the
"Guarantees"), (vi) warrants of the Company to purchase Debt Securities,
Preferred Stock or Class A Common Stock (the "Warrants"), (vii) stock purchase
contracts to purchase Class A Common Stock or Preferred Stock (the "Purchase
Contracts") and (viii) stock purchase units, each representing ownership of a
Purchase Contract and Debt Securities, Preferred Securities or debt obligations
of the United States of America or agencies or instrumentalities thereof,
securing the holder's obligation to purchase Class A Common Stock or Preferred
Stock under the Purchase Contracts (the "Stock Purchase Units") and (B) 525,000
shares of Class A Common Stock by certain shareholders of the Company named in
the Registration Statement (the "Selling Shareholders").
The senior Debt Securities are to be issued pursuant to an Indenture (the
"Senior Indenture") between the Company and The Bank of New York, as trustee.
The subordinated Debt Securities are to be issued pursuant to an Indenture (the
"Subordinated Indenture") between the Company and The Bank of New York, as
trustee. The junior subordinated Debt Securities are to be issued pursuant to
an Indenture (the "Junior Subordinated Indenture") between the Company and The
Bank of New York, as trustee. The Bank of New York, in its capacity as trustee
under the Senior Indenture, the Subordinated Indenture and the Junior
Subordinated Indenture, is referred to herein as the "Trustee" and the Senior
Indenture, Subordinated Indenture and Junior Subordinated Indenture are referred
to herein collectively as the "Indentures". The Preferred Securities are to be
issued from time to time by each Trust pursuant to an Amended and Restated
Declaration of Trust (the "Amended Declaration") to be filed with the Secretary
of State of the State of Delaware by the Trustee of the relevant Trust.
We have, as counsel, examined such corporate records, certificates and
other documents and reviewed such questions of law as we have deemed necessary,
relevant or appropriate to enable us to render the opinions expressed below. In
rendering such opinions, we have assumed the genuineness of
<PAGE>
Hispanic Broadcasting Corporation
October 15, 1999
Page 2 of 5
all signatures and the authenticity of all documents examined by us. As to
various questions of fact material to such opinions, we have relied upon
representations of the Company.
Based upon such examination and representations, we advise you that, in our
opinion:
1. Assuming that the Indentures, any Debt Securities and any supplemental
indentures to be entered into in connection with the issuance of such Debt
Securities have been duly authorized, when (i) a supplemental indenture in
respect of the Debt Securities has been duly executed and delivered, (ii) the
terms of the Debt Securities have been duly established in accordance with the
applicable Indenture and the applicable supplemental indenture relating to such
Debt Securities so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company and so
as to comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company, and (iii)
the Debt Securities have been duly executed and authenticated in accordance with
the applicable Indenture and the applicable supplemental indenture relating to
such Debt Securities and duly issued and delivered by the Company in the manner
contemplated on the Registration Statement and any prospectus supplement
relating thereto, the Debt Securities (including any Debt Securities duly issued
(a) upon exchange or conversion of any shares of Preferred Stock that are
exchangeable or convertible into Debt Securities, (b) upon the exercise of any
Warrants exercisable for Debt Securities or (c) as part of Stock Purchase Units)
will constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, except as (1) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereinafter in effect relating to or
affecting the enforcement of creditor's rights generally, and (2) the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a proceeding at law
or in equity).
2. Assuming that the Guarantees have been duly authorized, when (i) the
applicable Guarantee Agreement (the "Guarantee Agreement") has been duly
executed and delivered so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company, and (ii)
the Preferred Securities have been duly issued and delivered by the applicable
Trusts contemplated by the Registration Statement and any prospectus supplement
relating thereto, the Guarantees will constitute valid and binding obligations
of the Company, enforceable in accordance with their terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or similar laws now or hereinafter in effect
relating to or affecting the enforcement of creditors' rights generally, and (b)
the availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a proceeding at law
or in equity).
3. Assuming that a Warrant Agreement relating to the Warrants, (the
"Warrant Agreement") has been duly authorized, when (i) the Warrant Agreement
has been duly executed and delivered, (ii) the terms of the Warrants and of
their issuance and sale have been duly established in conformity with the
Warrant Agreement relating to such Warrants so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental or regulatory body having jurisdiction over
the Company, and (iii) the Warrants have been duly executed and countersigned in
accordance with
<PAGE>
Hispanic Broadcasting Corporation
October 15, 1999
Page 3 of 5
the Warrant Agreement relating to such Warrants, and issued and sold in the
form and in the manner contemplated in the Registration Statement and any
prospectus supplement relating thereto, such Warrants will constitute valid
and binding obligations of the Company, enforceable in accordance with their
terms, except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereinafter in effect relating to or affecting creditors' rights
generally, and (b) the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
4. Assuming that a Purchase Contract Agreement relating to the Purchase
Contracts (the "Purchase Contract Agreement") and such Purchase Contracts have
been duly authorized, when (i) the Purchase Contract Agreement has been duly
executed and delivered, (ii) the terms of the Purchase Contracts and of their
issuance and sale have been duly established in conformity with the Purchase
Contract Agreement so as not to so as not to violate any applicable law or
result in a default under or breach of any agreement or instrument binding upon
the Company and so as to comply with any requirement or restriction imposed by
any court or governmental or regulatory body having jurisdiction over the
Company, and (iii) the Purchase Contracts have been duly executed and issued in
accordance with the Purchase Contract Agreement relating to such Purchase
Contracts, and issued and sold in the form and in the manner contemplated in the
Registration Statement and any prospectus supplement relating thereto, such
Purchase Contracts will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereinafter in effect relating
to or affecting creditors' rights generally, and (b) the availability of
equitable remedies may be limited by equitable principles of general
applicability (regardless of whether considered in a proceeding at law or in
equity).
5. Assuming that the Stock Purchase Units, the Purchase Contract
Agreement relating to the Purchase Contracts comprising a part of the Stock
Purchase Units and such Purchase Contracts have been duly authorized, when (i)
the Purchase Contract Agreement has been duly executed and delivered, (ii) the
terms of the Purchase Contracts and of their issuance and sale have been duly
established in conformity with the Purchase Contract Agreement so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company, (iii) the terms of the collateral
arrangements relating to such Stock Purchase Units have been duly established
and the agreement(s) relating thereto have been duly executed and delivered, in
each case so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
or regulatory body having jurisdiction over the Company and the collateral has
been deposited with the collateral agent in accordance with such arrangements,
and (iv) the Purchase Contracts have been duly executed and issued in accordance
with the Purchase Contract Agreement relating to such Purchase Contracts, and
issued and sold in the form and in the manner contemplated in the Registration
Statement and any prospectus supplement relating thereto, such Stock Purchase
Units will constitute valid and binding obligations of the Company, enforceable
in accordance with their terms, except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereinafter in effect
<PAGE>
Hispanic Broadcasting Corporation
October 15, 1999
Page 4 of 5
relating to or affecting creditors' rights generally, and (b) the
availability of equitable remedies may be limited by equitabl principles of
general applicability (regardless of whether considered in a proceeding at
law or in equity).
6. Upon designation of the relative rights, preferences and limitations
of any series of Preferred Stock by the Board of Directors of the Company and
the proper filing with the Secretary of State of the State of Delaware of a
Statement of Designations, Preferences and Rights relating to such series of
Preferred Stock, all necessary corporate action on the part of the Company will
have been taken to authorize the issuance and sale of such series of Preferred
Stock proposed to be sold by the Company, and when such shares of Preferred
Stock are paid for, issued and delivered in accordance with the applicable
underwriting or other agreement, such shares of Preferred Stock (including any
shares of Preferred Stock issued (i) upon exercise of any Warrants for Preferred
Stock, (ii) upon conversion of any Debt Securities that are convertible or
exchangeable into Preferred Stock or (iii) pursuant to Stock Purchase Contracts)
will be validly issued, fully paid and non-assessable.
7. When all necessary corporate action on the part of the Company has
been taken to authorize the issuance and sale of such shares of Class A Common
Stock proposed to be sold by the Company, and when such shares of Class A Common
Stock are issued and delivered in accordance with the applicable underwriting or
other agreement, such shares of Class A Common Stock (including any shares of
Class A Common Stock issued (i) upon exercise of any Warrants for Class A Common
Stock, (ii) upon conversion of any Debt Securities that are convertible or
exchangeable for Class A Common Stock, (iii) pursuant to Stock Purchase
Contracts, or (iv) upon the exchange or conversion of any shares of Preferred
Stock that are exchangeable or convertible into Class A Common Stock) will be
validly issued, fully paid and non-assessable.
8. The shares of Class A Common Stock proposed to be sold by the Selling
Stockholders are, and when such shares are sold as contemplated by the
applicable underwriting or other agreement will be, validly issued, fully paid
and non-assessable.
In connection with the opinions expressed above, we have assumed that, at
or prior to the time of the delivery of any security, (i) the Board of Directors
shall have duly established the terms of such security and duly authorized the
issuance and sale of such security and such authorization shall not have been
modified or rescinded, (ii) the Registration Statement shall have been declared
effective and such effectiveness shall not have been terminated or rescinded,
and (iii) there shall not have occurred any change in law affecting the validity
or enforceability of such security. We have also assumed that none of the terms
of any security to be established subsequent to the date hereof, nor the
issuance and delivery of such security, nor the compliance by the Company with
the terms of such security will violate any applicable law or will result in a
violation of any provision of any instrument or agreement then binding upon the
Company, or any restriction imposed by any court or governmental body having
jurisdiction over the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In addition, we consent to the reference to us under the
caption "Legal Opinions" in the Registration Statement.
<PAGE>
Hispanic Broadcasting Corporation
October 15, 1999
Page 5 of 5
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
/s/ AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
<PAGE>
EXHIBIT 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
October 15, 1999
The HBC Trusts
(as defined below)
c/o Hispanic Broadcasting Corporation
3102 Oak Lawn Avenue, Suite 215
Dallas, Texas 75219
Re: THE HBC TRUSTS (AS DEFINED BELOW)
Ladies and Gentlemen:
We have acted as special Delaware counsel to HBC Capital Trust I
(formerly known as Heftel Capital Trust I) and HBC Capital Trust II (formerly
known as Heftel Capital Trust II), each a Delaware statutory business trust
(collectively referred to herein as the "HBC Trusts" and each, individually, as
a "HBC Trust"), in connection with certain matters relating to the creation of
the HBC Trusts and the proposed issuance of Preferred Securities therein to
beneficial owners pursuant to and as described in the Registration Statement
(and the Prospectus forming a part thereof) on Form S-3 filed with the
Securities and Exchange Commission (the "Commission") by the HBC Trusts and
Hispanic Broadcasting Corporation (formerly known as Heftel Broadcasting
Corporation) (the "Corporation") on or about the date hereof (the "Registration
Statement"). Capitalized terms used herein and not otherwise herein defined are
used with respect to each HBC Trust as defined in the form of Amended and
Restated Declaration of Trust of such HBC Trust that was filed as an exhibit to
the Corporation's Registration Statement on Form S-3 (Reg. No. 333-42171) and
incorporated by reference in the Registration Statement (the form of Amended and
Restated Declaration of each HBC Trust is referred to herein as a "Governing
Instrument").
In rendering this opinion, we have examined and relied upon copies of
the following documents in the forms provided to us: the Certificate of Trust
of each HBC Trust as filed in the Office of the Secretary of State of the State
of Delaware (the "State Office") on November 6, 1997 (the Certificate of Trust
of each HBC Trust is referred to herein as a " Certificate"); the Certificate of
Amendment to Certificate of Trust of each HBC Trust as filed in the State Office
on September 17, 1999 (the Certificate of Amendment to Certificate of Trust of
each HBC Trust is referred to herein as a "Certificate Amendment"); the
Declaration of Trust of each HBC Trust dated as of November 6, 1997 (the
Declaration of Trust of each HBC Trust is referred to herein as an "Original
Governing Instrument"); the Governing Instrument; the form of Junior
Subordinated Indenture to be entered into between the Corporation and the Bank
of New York, as Trustee; the form of Guarantee Agreement to be made by the
Corporation with respect to each HBC Trust; the Registration Statement; and a
certification of good standing of each HBC Trust obtained as of a recent date
from the State Office. In such examinations, we have assumed the genuineness of
all signatures, the conformity to original documents of all documents submitted
to us as drafts or copies or forms of documents
<PAGE>
The HBC Trusts
October 15, 1999
Page 2 of 3
to be executed and the legal capacity of natural persons to complete the
execution of documents. We have further assumed for purposes of this
opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the HBC Trusts) that is a party to any of
the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution
and delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents with respect to each HBC Trust; (iii) that the
name change of each HBC Trust reflected in each Certificate Amendment was
duly adopted by such HBC Trust; (iv) that the Corporation or the Regular
Trustees (or both) will, prior to the first issuance of Preferred Securities
by any HBC Trust, duly enter into an underwriting agreement on behalf of each
HBC Trust relating to the Preferred Securities to be issued by such HBC Trust
which shall provide for the terms and conditions upon which such Preferred
Securities shall be issued (the "Underwriting Agreement"); (v) that the
Corporation, the Bank of New York, the Bank of New York (Delaware) and the
appropriate Regular Trustees will duly authorize, execute and deliver the
applicable Governing Instrument, and all other documents contemplated thereby
or by the Registration Statement to be executed in connection with the
issuance by each HBC Trust of Preferred Securities, in each case prior to the
first issuance of Preferred Securities; (vi) that the Preferred Securities of
each HBC Trust will be offered and sold pursuant to the Registration
Statement and a prospectus supplement that will be consistent with, and
accurately describe, the terms of the applicable Governing Instrument and the
applicable Guarantee Agreement relating to each such HBC Trust and all other
relevant documents; (vii) that no event has occurred subsequent to the filing
of any Certificate that would cause a dissolution or liquidation of any HBC
Trust under the applicable Original Governing Instrument or the applicable
Governing Instrument; (viii) that the activities of each HBC Trust have been
and will be conducted in accordance with its Original Governing Instrument or
its Governing Instrument, as applicable, and the Delaware Business Trust Act,
12 DEL. C. Sections 3801 ET SEQ. (the "Delaware Act"); (ix) that each Holder
of Preferred Securities of a HBC Trust has, or prior to the first issuance of
Preferred Securities of such HBC Trust will have, made payment of the
required consideration therefor and received a Preferred Securities
Certificate of such HBC Trust in consideration thereof in accordance with the
terms and conditions of the applicable Governing Instrument, the Registration
Statement, the applicable prospectus supplement and the Underwriting
Agreement and that the Preferred Securities of each HBC Trust are otherwise
issued and sold in accordance with the terms, conditions, requirements and
procedures set forth in the applicable Governing Instrument, the Registration
Statement, the applicable prospectus supplement and the Underwriting
Agreement; and (ix) that the documents examined by us are in full force and
effect, express the entire understanding of the parties thereto with respect
to the subject matter thereof and have not been amended, supplemented or
otherwise modified, except as herein referenced. No opinion is expressed
with respect to the requirements of, or compliance with, federal or state
securities or blue sky laws. We have not participated in the preparation of
the Registration Statement or any other offering material relating to the
Preferred Securities, and we assume no responsibility for their contents. As
to any fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and
certificates and on the accuracy, as of the date hereof, of the matters
therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. Each HBC Trust is a duly formed and validly existing statutory
business trust in good standing under the laws of the State of Delaware.
<PAGE>
The HBC Trusts
October 15, 1999
Page 3 of 3
2. The Preferred Securities of each HBC Trust, upon issuance, will
constitute validly issued and, subject to the qualifications set forth in
paragraph 3 below, fully paid and non-assessable beneficial interests in the
assets of such HBC Trust.
3. Under the Delaware Act and the terms of the applicable Governing
Instrument, each Preferred Security Holder of a HBC Trust, in such capacity,
will be entitled to the same limitation of personal liability as that extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided, however, we express no
opinion with respect to the liability of any Preferred Security Holder of a HBC
Trust who is, was or may become a named Trustee of such HBC Trust. We note that
pursuant to Section 11.04 of each Governing Instrument, each HBC Trust may
withhold amounts otherwise distributable to a Holder of such HBC Trust and pay
over such amounts to the applicable jurisdictions in accordance with federal,
state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to each Governing Instrument,
Preferred Security Holders of a HBC Trust may be obligated to make payments or
provide indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Opinions" in the Prospectus forming a part thereof. In giving this consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission thereunder. This opinion speaks only as
of the date hereof and is based on our understandings and assumptions as to
present facts, and on our review of the above-referenced documents and the
application of Delaware law as the same exist as of the date hereof, and we
undertake no obligation to update or supplement this opinion after the date
hereof for the benefit of any person or entity with respect to any facts or
circumstances that may hereafter come to our attention or any changes in facts
or law that may hereafter occur or take effect. This opinion is intended solely
for the benefit of the addressees hereof in connection with the matters
contemplated hereby and may not be relied on by any other person or entity or
for any other purpose without our prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE>
EXHIBIT 12.1
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES
Computation Of Ratio Of Earnings To Fixed Charges
(in thousands except ratio)
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
------------------------------------ ------------------------------------
1999 1998 1998 1997
----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing operations
before income taxes $ 22,534 $ 20,766 $ 44,624 $ 31,389
Fixed charges 1,246 1,959 3,292 4,863
Undistributed income from an investment
in a less-than-fifty-percent owned
person accounted for under the equity
method -- -- -- --
-------- -------- -------- --------
Earnings as adjusted (A) $ 23,780 $ 22,725 $ 47,916 $ 36,252
======== ======== ======== ========
Fixed Charges:
Interest expense $ 577 $ 1,366 $ 2,046 $ 3,947
Interest portion of rental expense (1) 669 593 1,246 916
-------- -------- -------- --------
Total fixed charges (B) $ 1,246 $ 1,959 $ 3,292 $ 4,863
======== ======== ======== ========
Ratio of earnings to fixed charges (A) divided
by (B) 19.1 11.6 14.6 7.5
Deficiency of earnings to cover fixed charges
(B) minus (A) $ -- $ -- $ -- $ --
Three Months Year Ended September 30,
Ended ----------------------------------------------------
December 31, 1996 1996 1995 1994
----------------- ----------------- ----------------- ------------------
Income (loss) from continuing operations
before income taxes $ 2,164 $(29,092) $ 4,469 $ 2,588
Fixed charges 2,965 11,793 7,055 3,377
Undistributed income from an investment
in a less-than-fifty-percent owned
person accounted for under the equity
method -- -- -- (616)
-------- -------- -------- --------
Earnings as adjusted (A) $ 5,129 $(17,299) $ 11,524 $ 5,349
======== ======== ======== ========
Fixed Charges:
Interest expense $ 2,867 $ 11,241 $ 6,607 $ 3,180
Interest portion of rental expense (1) 98 552 448 197
-------- -------- -------- --------
Total fixed charges (B) $ 2,965 $ 11,793 $ 7,055 $ 3,377
======== ======== ======== ========
Ratio of earnings to fixed charges (A) divided
by (B) 1.7 -- 1.6 1.6
Deficiency of earnings to cover fixed charges
(B) minus (A) $ -- $ 29,092 $ -- $ --
</TABLE>
(1) Management of the Company believes approximately one-third of rent
expense is representative of the interest component of rent expense.
<PAGE>
EXHIBIT 12.2
HISPANIC BROADCASTING CORPORATION AND SUBSIDIARIES
Computation Of Ratio Of Earnings To Combined Fixed Charges
And Preferred Stock Dividends
(in thousands except ratio)
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
------------------------- ------------------------
1999 1998 1998 1997
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing operations
before income taxes $ 22,534 $ 20,766 $ 44,624 $ 31,389
Fixed charges 1,246 1,959 3,292 4,863
Undistributed income from an investment
in a less-than-fifty-percent owned
person accounted for under the equity
method -- -- -- --
-------- -------- -------- --------
Earnings as adjusted (A) $ 23,780 $ 22,725 $ 47,916 $ 36,252
======== ======== ======== ========
Fixed Charges:
Interest expense $ 577 $ 1,366 $ 2,046 $ 3,947
Interest portion of rental expense (1) 669 593 1,246 916
-------- -------- -------- --------
Total fixed charges 1,246 1,959 3,292 4,863
Preferred stock dividends (2) -- -- -- --
-------- -------- -------- --------
Total fixed charges and preferred stock
dividends (B) $ 1,246 $ 1,959 $ 3,292 $ 4,863
======== ======== ======== ========
Ratio of earnings to combined fixed charges
and preferred stock dividends (A) divided
by (B) 19.1 11.6 14.6 7.5
Deficiency of earnings to cover combined fixed
charges and preferred stock dividends
(B) minus (A) $ -- $ -- $ -- $ --
<CAPTION>
Three Months Year Ended September 30,
Ended --------------------------------------
December 31, 1996 1996 1995 1994
------------------ --------- ---------- --------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing operations
before income taxes $ 2,164 $(29,092) $ 4,469 $ 2,588
Fixed charges 2,965 11,793 7,055 3,377
Undistributed income from an investment
in a less-than-fifty-percent owned
person accounted for under the equity
method -- -- -- (616)
-------- -------- -------- --------
Earnings as adjusted (A) $ 5,129 $(17,299) $ 11,524 $ 5,349
======== ======== ======== ========
Fixed Charges:
Interest expense $ 2,867 $ 11,241 $ 6,607 $ 3,180
Interest portion of rental expense (1) 98 552 448 197
-------- -------- -------- --------
Total fixed charges 2,965 11,793 7,055 3,377
Preferred stock dividends (2) -- 20 75 191
-------- -------- -------- --------
Total fixed charges and preferred stock
dividends (B) $ 2,965 $ 11,813 $ 7,130 $ 3,568
======== ======== ======== ========
Ratio of earnings to combined fixed charges
and preferred stock dividends (A) divided
by (B) 1.7 -- 1.6 1.5
Deficiency of earnings to cover combined fixed
charges and preferred stock dividends
(B) minus (A) $ -- $ 29,112 $ -- $ --
</TABLE>
(1) Management of the Company believes approximately one-third of rent
expense is representative of the interest component of rent expense.
(2) Represents pretax earnings required to cover preferred stock dividends.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectuses of Hispanic
Broadcasting Corporation (formerly Heftel Broadcasting Corporation), HBC
Capital Trust I, and HBC Capital Trust II and to the incorporation by
reference therein of our report dated July 2, 1997, with respect to the
consolidated financial statements and schedule of Hispanic Broadcasting
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1998, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Los Angeles, California
October 14, 1999
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Hispanic Broadcasting Corporation:
We consent to the incorporation by reference herein of our report on the
consolidated financial statements and financial statement schedule of Hispanic
Broadcasting Corporation (formerly Heftel Broadcasting Corporation) and
subsidiaries as of and for the years ended December 31, 1998 and 1997 and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Dallas, Texas
October 15, 1999
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Hispanic Broadcasting Corporation:
We consent to incorporation by reference in the Registration Statements on Form
S-3 of Hispanic Broadcasting Corporation (formerly Heftel Broadcasting
Corporation) of our report dated February 26, 1998 (except as to Notes 3 and 7
for which the date is May 22, 1998), relating to the balance sheet of
Multicultural Radio Broadcasting, Inc. as of December 31, 1997 and the related
statements of income, stockholder's equity, and cash flows for the year then
ended which appears in the Current Report on Form 8-K of Heftel Broadcasting
Corporation filed on June 4, 1998, as amended by Form 8-K/A filed on July 31,
1998.
WISS & COMPANY, LLP
Livingston, New Jersey
October 14, 1999
