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How Is Clear Channel Dealing With Debt?
2-28-2013
That's the question Chris Nolter addressed in detail for his latest column in The Deal Pipeline after Clear Channel announced yesterday it had closed on a $575 million offering. The company will use the proceeds, funds from a revolver and cash, to pay down a loan due in 2014. Nolter says Clear Channel is still debt challenged. "The most daunting of which is $10 billion in debt that matures in 2016. The options include more financings, distressed-debt exchanges, and perhaps more equity from PE backers Bain Capital LLC and T H. Lee Partners LP, whose equity is arguably underwater."
And Nolter points out that Clear Channel also has more than $20 billion in long-term debt. "About half of the debt matures in 2016. In January of that year, $8.2 billion in term loans come due. There is a $1.9 billion maturity of senior unsecured notes in August 2016." Nolter quotes both Scott Van den Bosch of Moody's Investors Service and CRT Capital Group LLC analyst Lance Vitanza.
Van den Bosch told Nolter, "If the economy is strong enough and the performance is good enough, they could get through this." Vitanza said, "They've done an excellent job -- with the caveat that there is still more wood to chop." He said the company has been "very creative" in managing its balance sheet since the LBO. "It is much more likely today that they grow into their capital structure than it was a few years ago."
Read Chris Nolter's very detailed piece about Clear Channel's debt HERE
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(3/1/2013 7:19:37 AM) The article never addresses the fact that revenue will decline or be flat at best this year. Maybe IHeart radio will make tons of money and bail them out. |
| - Seth |
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