Clear Channel goes Dutch for bond buyback


Clear Channel Communications and one of its subsidiaries announced modified Dutch auction tender offers for various issues of senior notes. In all, Clear Channel is offering to buy back up to $300 million of its outstanding debt. But it isn’t going to pay anywhere near that much. With bonds of many media companies trading at a deep discount to their face value, Clear Channel is looking to buy back its bonds for a lot less than it got when they were issued.

The biggest portion of the tender offer will be an attempt to buy back $200 million in face value of Clear Channel’s 7.65% senior notes due 2010, of which a little over $386 million are outstanding. Under the Dutch auction rules, the company will accept bids to sell in a range of $500-650 per $1,000 face value. It will then accept up to $200 million face value at the lowest bid price which would cover that amount.

Clear Channel’s CC Finco LLC subsidiary will also tender for two series of notes due 2011, with a bid range of $200-250 for the 4.4% notes and $270-320 for the 6.25% notes. And it will tender for 5% notes due 2012 in a range of $150-200 and 5.75% notes due 2013 in a range of $125-175. The complicated auction procedures will accept up to $75 million face value of the 2011 notes and $25 million of the 2012/2013 notes.

RBR/TVBR observation: Hey, if you can buy back some of your outstanding debt for 15-65 cents on the dollar and you have the cash to do so – go for it! Never let it be said the people who run Clear Channel and its parent company, CC Media Holdings, don’t know how to count money.