Clear Channel Documents Reveal Credit Proposal
April 1, 2008 at 5:15 AM (PT)
Court documents related to the fight between buyers and banks over the $20 billion buyout of CLEAR CHANNEL COMMUNICATIONS, obtained by REUTERS on FRIDAY (4/1), gave details of a proposed credit agreement to fund the deal.
THOMAS H. LEE PARTNERS AND BAIN CAPITAL PARTNERS LLC filed complaints on WEDNESDAY in NEW YORK and TEXAS against CITIGROUP INC, MORGAN STANLEY, CREDIT SUISSE GROUP, ROYAL BANK OF SCOTLAND GROUP PLC, DEUTSCHE BANK AG and WACHOVIA CORP, to force completion of the deal (NET NEWS 3/26). CLEAR CHANNEL is also joining THL and BAIN in a complaint filed in TEXAS against the banks.
The private equity buyers and CLEAR CHANNEL claim the banks balked when the debt markets deteriorated, and asked for a change in terms of the deal that prevented it from being completed, according to a copy of one of the suits. The banks say the suits are without merit.
The court documents, dated MARCH 26th, obtained by REUTERS in NEW YORK Supreme Court, show an "execution copy" of a credit agreement for $17.53 billion. It is unclear whether the agreement, dated MATCH 27th, was drawn up by the banks or by the buyers.
The credit agreement calls for $15.53 billion in term loans, of which the largest is Tranche B of $12.6 billion.
For the largest tranche, Tranche B, CLEAR CHANNEL would have paid 300-325 basis points over the LONDON interbank offered rate (LIBOR).
Another "execution copy" which is dated MARCH 27th, details a $2.6 billion senior unsecured interim loan.