Report: CC Lenders Deepen Discount On Bank Loans
July 1, 2008 at 5:37 AM (PT)
CLEAR CHANNEL COMMUNICATIONS' banks, seeking investors to help finance the company's $17.9 billion leveraged buyout, cut the offering price on some loans, according to people with knowledge of the offering. BLOOMBERG reports CITIGROUP and DEUTSCHE BANK AG are leading banks offering $3 billion of the debt to investors in the mid-80-cents range, down from 90 cents to 91 cents last week, said the people, who declined to be identified before the loans are sold.
The price cut reflects a decline in average actively traded loans. Prices fell to 89.9 cents on the dollar from 92.1 on JUNE 19th, the first time it dipped below 90 cents since APRIL, according to data compiled by STANDARD & POOR'S. The discounting indicates that a rally in loan prices in APRIL and MAY has ended.
"It's a tough time to get a deal done," said KDP analyst MATTHEW WILCOX. "Banks may have to increase the discount or change the terms of the debt."
MORGAN STANLEY, WACHOVIA CORP. CREDIT SUISSE GROUP AG and ROYAL BANK OF SCOTLAND GROUP PLC are the other banks now providing $19.1 billion of debt financing for CLEAR CHANNEL, according to a U.S. Securities and Exchange Commission regulatory filing on JUNE 2nd.