Clear Channel Offers $2 Billion Debt-For-Notes Deal To Lenders

Debt-For-Notes Deal

CLEAR CHANNEL COMMUNICATIONS, INC. has launched a private offer to exchange up to $2 billion aggregate principal amount of term loans under its cash flow credit facilities for the same amount of new 9% priority guarantee notes due 2019.  The swap is being accompanied by moves to amend the company's credit facilities to allow up to $5 billion exchange offers of term loans for new debt securities and give the company more repayment flexibility, with lender acceptance of the $2 billion debt-for-notes swap contingent on accepting the amendments.  Eligible lenders who want to take the deal have until noon (ET) on OCTOBER 19th.

CCU parent CLEAR CHANNEL CAPITAL I, LLC and its subsidiaries are guaranteeing the notes with a lien on CCU capital stock and "certain property and related assets that do not constitute 'principal property,'" as well as a lien on accounts receivable.

The amendments also include greater flexibility to prepay tranche A term loans, and, once they are paid off, to allow below par non-pro rata purchases of term loans under Dutch auction procedures and to allow the repurchase of junior debt maturing before JANUARY 2016 with cash on hand up to $200 million.  Also allowed under the proposed amendments is the combination of some of the company's term loans, preservation of the company's revolving credit facility capacity if it pays off its outstanding balance, and elimination of some of the restrictions on CLEAR CHANNEL OUTDOOR HOLDINGS, INC. to incur debt.

The company is facing looming repayment deadlines for a substantial amount of debt, with billions due in 2014 and 2016.

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