Clear Channel Outdoor has priced its sale of senior subordinated notes and the Wall Street reception was so good that the size of the offering was increased significantly. Instead of raising $1.25 billion the company sold $2.2 billion of new notes.
Instead of the $3.50 per share dividend calculated by Wells Fargo Securities analyst Marci Ryvicker, the much larger bond sale has resulted in the board of directors at Clear Channel Outdoor (CCO) declaring a special dividend of $6.08 per share. The net proceeds are projected to be $2.167 billion, including some cash on hand at CCO, with $1.925 billion going to Clear Channel Communications, the 89% shareholder, and the remaining $242 million going to the public shareholders who have the other 11%.
CCO sold $275 million of Series A Senior Subordinated Notes due 2020 with a coupon of 7.625% and $1.925 billion of Series B Senior Subordinated Notes due 2020, also with a 7.625% coupon.
The special dividend will be paid March 12th to shareholders of record as of February 28th. Once Clear Channel Communications gets hold of its $1.925 billion it plans to pay down debt under its senior security credit facilities.
RBR-TVBR observation: The bond market is still pretty hot on Wall Street. This doesn’t change the total debt load of Clear Channel, but does go a long way to deal with debt maturities through 2014, with the next big wall of maturities in 2016.