Not that there are any difficulties in relations with its current lender, Clear Channel Communications. However, Clear Channel Outdoor says it is looking at alternatives as the due date for its $2.5 billion intercompany note draws nearer.
“The alternatives may include an offering of new senior or senior subordinated notes for cash or an exchange of new senior or subordinated notes for outstanding indebtedness, with the intention of any such transaction being to refinance the intercompany note. The timing and structure of any transaction will depend on market conditions. The amounts involved may be material. There can be no assurance that any transaction will take place, the timing of any transaction or that it will be successful,” the billboard company said.
“Like CBS and Lamar, a refinancing could help CCO shares, as it could push out the debt maturity date and possibly relieve an overhang. While the market maintains corporate governance concerns, we believe opportunity outweighs risk,” said Barclays Capital analyst Anthony DiClemente in a note to clients.
He is more upbeat about CC Outdoor than its 90% parent company, CC Media Holdings, which acquired Clear Channel Communications last year. “While a bankruptcy filing is possible for CCM, we believe this could be a positive for CCO. CCM could also buy in the 10% publicly traded stub of CCO with proceeds from the repayment of CCO’s $2.5B intercompany note,” the analyst said.
RBR/TVBR observation: If good terms can be found – and the marketplace is improving a bit – it would certainly be advantageous for Clear Channel Communications to have someone else lend money to Clear Channel Outdoor.