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Clear Channel moves to address debt load

by Chris Nolter  |  Published February 29, 2012 at 4:30 PM
Clear_Channel_227x128.jpgDebt-laden radio group Clear Channel Communications Inc. could be in position to knock down some of its looming maturities after a recently announced debt issuance by a subsidiary.

Publicly traded Clear Channel Outdoor Holdings Inc., in which Clear Channel owns an 89% stake, said Monday that one of its units will issue $1.25 billion in Series A and B senior subordinated notes that would come due in 2020.

Clear Channel Worldwide Holdings Inc., which is the outdoor unit issuing the debt, will use the proceeds to pay a special dividend to holders of Class A and B shares.

Marci Ryvicker of Wells Fargo Securities LLC calculates that the payout would equal $3.50 per share, which would give the Clear Channel parent company more than $1.1 billion in cash.

With new CEO Bob Pittman running the company, Clear Channel has announced flashy initiatives such as its iHeartRadio online music site and an expanded partnership with Ryan Seacrest.

The largest U.S. radio group has also been seeking opportunities to reduce its debt load, which expanded greatly with its 2008 sale to Bain Capital LLC and Thomas H. Lee Partners LP.

Clear Channel has close to $20 billion in long-term debt. The San Antonio company faces particularly large payments in 2014 and 2016, with maturities of $2.87 billion and $12.25 billion, respectively.

Moody's Investors Service suggested in a recent note that Clear Channel will use the dividend to address its "highly leveraged and unsustainable debt capital structure." Clear Channel Worldwide could issue more debt to aid its parent.

Shares of Clear Channel Outdoor, which places outdoor advertisements in more than 40 countries, were up 22 cents, or about 1.7%, to $13.26 early Wednesday afternoon.
Tags: Bob Pittman | Clear Channel Communications Inc. | Clear Channel Outdoor Holdings Inc. | Clear Channel Worldwide Holdings Inc. | Marci Ryvicker

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