AM FM Fall 2009 Phase I Birmingham AL Honolulu HI Huntsville AL Colorado Springs Fresno CA Charlotte NC Gainesville FL Orlando FL West Palm Beach Buffalo NY Kidd Kraddick Jackson Blue Jody Dean Peter Z Paul, Lisa and Chris Mark Phillips Mark and Brian Bob Buchmann Kevin and Bean Sluggo Tommy Griffiths Stryker Valentine Hollywood Hamilton Shawn Parr Paul Freeman Kennedy Lee Valsvik Greg & Melissa Weasel, Josh & Nick

After failing twice to restructure its debt, private-equity firms THL Partners and Bain Capital that acquired Clear Channel last year, are asking some large banks to help keep the company from defaulting on its loans, reports the New York Post. But sources say these are the same institutions that the firms fought to force the banks to live up to their commitment to fund the buyout.

That means Clear Channel may now default on its highly leveraged $27 billion buyout by year-end or early next year, sources said.The radio giant is in danger of exceeding a loan requirement that its senior debt equal no more than 9.25 times its cash flow.

You might remember that the banks that underwrote the debt -- Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, RBS and Wachovia -- wanted both THL Partners and Bain Capital to walk away from the buyout. But the PE firms forced the banks to issue loans that would be difficult to syndicate. Since then, most of the lenders have since sold their CC debt at discount prices.

The PE firms together own 16 percent of Clear Channel's senior loans, and if the company goes bankrupt, they would likely own a piece of the de-leveraged business, which could turn into a profitable investment, reports the newspaper.

Meanwhile, banking sources told The New York Times "Dealbook" that neither Bain Capital or THL Partners have approached any of the banks to prevent the radio giant from defaulting or with a plan to restructure the company's debt. (10-07-09)

Menu | Contact Us | Subscribe | Advertise | Privacy Policy | About Us

Copyright © 1989-2009 RADIO ONLINE ® The publisher makes no claims concerning the validity of the information posted on RADIO ONLINE and will not be held liable for its use. No part of this material may be reproduced in any form, incorporated in any information retrieval system or otherwise redistributed without the prior written permission of the publisher.