Unusual iHeart move draws CDS credit event questions

US radio operator iHeart Communications has taken an unusual step of leaving certain bonds, which it owns, outstanding on the maturity date today

Comment by: Anonymous. Posted 7 years ago [2016-12-21 16:28:47]

Wouldn't the trustee for the bond issue be required to declare an Event of Default for this non-payment of principal? Further, why is the trustee permitted to pay some bondholders in full while failing to pay others? I am not aware that a bondholder (in this case, an affiliate of the issuer itself) has the option to decline the return of principal.