Posted by chicagomedia.org on May 23, 2009 at 08:48:43:
NY Post: CC Lenders Turn Down Debt Swap
NEW YORK -- May 22, 2009: The New York Post said Friday that Clear Channel's "efforts to avert bankruptcy hit a patch of static" as two senior lenders turned down a debt-exchange proposal from THL Partners and Bain Capital, the private equity firms that took Clear Channel private last year.
The Post's sources said the lenders "roundly rejected" the proposal, which reportedly involved an exchange of $15 billion in debt for $2.5 billion owed to Clear Channel by Clear Channel Outdoor. Had the lenders accepted the proposal, they would had first claim on the money from CC Outdoor, says the Post; without that, they willl share with other lenders should a bankruptcy filing occur.
Says the paper, "One lender noted that the Clear Channel loans he's holding have increased in value recently, trading at around 54 cents on the dollar, up from the high 40s range a few weeks ago, and he predicts they could be worth close to par in a bankruptcy given Clear Channel's assets have value. As such, the lender said he might fare better forcing the company into bankruptcy than accepting a debt swap."
The Post also stirred things up earlier this month, with a report that Clear Channel was in talks to restructure its debts and a "pre-packaged bankruptcy" was among the topics under discussion.