Clear Channel Lenders Give Consent for $5 Billion Debt Plan

Clear Channel Communications Inc. received permission from lenders allowing for the exchange of as much as $5 billion of debt.

The amendment allows the radio and billboard company to exchange term loans, to prepay portions of the debt, to allow for below par repurchases of term loans and to repay junior debentures as well as other measures in return for the new financing, San Antonio-based Clear Channel said yesterday in a statement distributed by Business Wire.

The transaction will help Clear Channel extend nearer-term obligations that include $1.1 billion of loans due in 2014, according to data compiled by Bloomberg. The company would still have to deal with more than $12 billion of debt maturing in 2016 that was put in place to finance its 2008 buyout by Bain Capital Partners LLC and Thomas H. Lee Partners LP, the data show.

“The amendments provide Clear Channel with additional flexibility to deal with upcoming maturities,” Karen Klapper, an analyst at debt research firm CreditSights Inc., said in a telephone interview today. “To address the debt coming due in 2016, a lot of things have to fall in place.”

Priority guarantee notes yielding 9 percent and maturing in 2019 were offered in exchange for $2 billion of term loans. More than $8 billion of loans were submitted for exchange by the time the offer expired on Oct. 19, the company said. To compensate for the additional demand, Clear Channel will reduce the term loans accepted from each lender on a pro rata basis.

The company’s $1.75 billion of 9 percent notes due March 2021 have gained 6.2 cents to 89.7 cents on the dollar from this year’s low reached on July 31, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds traded as high as 92 cents this month, the data show.

To contact the reporters on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net; Richard Bravo in New York at rbravo5@bloomberg.net

To contact the editors responsible for this story: Faris Khan at fkhan33@bloomberg.net; Alan Goldstein at agoldstein5@bloomberg.net

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