The $2.2 billion bond sale by Clear Channel Outdoor’s CC Worldwide subsidiary was much bigger than the $1.25 billion offering which Moody’s Investors Service had rated B3. But after reviewing the super-sized offering, the analysts at Moody’s have affirmed that B3 rating.
The ratings agency also affirmed its ratings on Clear Channel Outdoor’s existing debt, with the total now $4.7 billion of debt for the billboard company.
“Moody’s Investors Service affirmed the B3 rating assigned to Clear Channel Outdoor Holdings, Inc.’s (CCO) wholly-owned intermediate holdco subsidiary, Clear Channel Worldwide Holdings, Inc’s. (CCW) senior subordinated note issue that was upsized to $2.2 billion from $1.25 billion. The use of proceeds is to pay a dividend to its shareholders, Clear Channel Communications Inc (CCU) which owns 89% of CCO and public stockholders that own the remaining 11%,” Moody’s said in its updated statement.
“The B2 Corporate Family Rating (CFR), B1 Probability-of-Default Rating (PDR), and B1 rating on the existing Senior Unsecured Notes were affirmed. The LGD rating for the Senior Unsecured Note was changed from a 4 to a 3 and the point estimates for both notes changed as listed below,” Moody’s said. “The outlook remains stable,” it added.
In addition, Moody’s issued a statement that the deal was not likely to have an impact on its ratings for Clear Channel Communications.
Summary of Rating Actions:
Issuer – Clear Channel Worldwide Holdings, Inc.
Corporate Family Rating — B2 affirmed
Probability of Default Rating — B1 affirmed
$2.5 billion Series A and B Senior Unsecured Notes due 2017 — B1 affirmed (LGD 3, 45% upgraded from LGD 4, 52%)
$2.2 billion Series A and Series B Senior Subordinated Unsecured Notes due 2020 –affirmed B3 (LGD 6, 90% changed from 94%)
Speculative grade liquidity rating — remains SGL-2
Outlook — remains Stable
RBR-TVBR observation: The financial wizards at Clear Channel have performed magic again. Despite the company’s $20 billion-plus debt load it should have no problem meeting all maturities through 2015 – and that leaves lots of time to get the ducks in a row for the big pile of debt coming due in 2016.