Clear Channel Communications has completed its private placement of $750 million in new bonds on Wall Street. A half billion will be held in the corporate coffers, so the company again has a cash cushion to tap as needed.
The offering priced at 93.845% of the principal amount plus accrued interest from February 23, 2011. That was the date of the original offering of $1 billion of the 9.0% priority guarantee notes due 20211. The latest three-quarters of a billion was an add-on.
Clear Channel said it will use $203.8 million of the proceeds to repay at maturity a portion of its 5% legacy notes which mature in March 2012. The remaining $500 million will be held for corporate purposes, replenishing cash on hand that the company had previously used to pay legacy notes at maturity on March 15th and May 15th.
The closing announcement gives some hint of how Clear Channel may use that cash to de-lever and/or push out a large debt maturity coming in 2014: “The $500 million of proceeds available for general corporate purposes may be used to repay indebtedness, including repaying indebtedness outstanding under CCU’s revolving credit facilities (without reducing or terminating the associated commitments). In addition, such proceeds may be used in connection with one or more future transactions involving a permanent repayment of a portion of CCU’s senior secured credit facilities as part of CCU’s long-term efforts to optimize its capital structure.”