Bloomberg Says CC "Burning Cash to Delay Reckoning"

RADIO ONLINE | Monday, December 2, 2013

Bloomberg isn't making too many fans of Clear Channel executives these days. News writer Krista Giovacco has published a dismal view of the company's finances claiming Clear Channel is "Burning Cash to Delay Reckoning."

Responding to Clear Channel's recent proposal to extend nearly $1.8 billion of debt due in 2016 by as much as five years, Giavacco surmises they are "offering to double interest to push out maturities on some of the $4.3 billion it owes, just as the most-leveraged U.S. broadcaster suffers the first cash-flow deficit in four years." Citing a quote from Moody's Investors Service, this will raise the company's risk of missing interest payments on $20.7 billion of debt. In the article Moody's senior analyst Scott Van den Bosch says, "Refinancing at a higher rate is never a positive. It's not a cure-all, but it buys them time to improve the balance sheet."

The report also states that Bloomberg's data shows Clear Channel's "interest expenses have surpassed its operating income in every quarter since the end of 2008, and that its earnings before interest, taxes, depreciation and amortization have shrunk to $1.8 billion in the 12 months ended June 30 from $2.3 billion in 2007.

You can read the full Bloomberg report Here.