Moody's Says Clear Channel Restructuring 'Inevitable'

Hurdles Ahead

MOODY'S INVESTOR SERVICE has said in a new report that a restructuring of CLEAR CHANNEL COMMUNICATIONS "is inevitable," although owners BAIN CAPITAL and THOMAS H. LEE PARTNERS may try to delay it as long as possible, reports REUTERS.

Lead author NEIL BEGLEY wrote that CLEAR CHANNEL could issue additional debt through its outdoor unit to make it through 2014, but that would only postpone a restructuring by a couple of years. The company is facing a critical hurdle in 2016, when about $13.8 billion of debt comes due, and leverage is expected to remain too high to attract more investment and refinance the debt, MOODY's said.

"It is clear under our assumptions for operating improvement and valuation multiples that the company's debt levels are unmanageable and unrefinancable," wrote MOODY'S.

A spokesman for BAIN CAPITAL declined comment to REUTERS, and a spokesman for THOMAS H. LEE could not be reached for comment. A CLEAR CHANNEL spokesperson had no comment to ALL ACCESS.

REUTERS wrote "If CLEAR CHANNEL were to file for Chapter 11 bankruptcy protection, control of the company would be turned over to the creditors and the sponsors' initial investment would be lost."

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