Clear Channel $16.7706 billion credit facility targeted to launch this summer

By Sara Rosenberg

New York, June 5 - Clear Channel Communications Inc.'s $16.7706 billion senior secured credit facility is hoped to launch with a bank meeting sometime this summer, a market source told Prospect News on Thursday.

Citigroup, Deutsche Bank and Morgan Stanley are the joint lead arrangers and bookrunners on the deal, with Citi the administrative agent, Deutsche and Morgan Stanley the syndication agents, and Credit Suisse, RBS and Wachovia the co-documentation agents.

The facility consists of a $1 billion six-year receivables-based revolver, a $1.115 billion six-year term loan A, a $2 billion six-year revolver, a $10.7 billion 71/2-year term loan B, a $705.6 million 71/2-year asset sale term loan C and a $1.25 billion 71/2-year delayed-draw term loan, according to a recent filing with the Securities and Exchange Commission.

The receivables-based revolver is initially priced at Libor plus 240 basis points and pricing can range from Libor plus 215 bps to 240 bps, depending on leverage, the filing said.

The term loan A and revolver are initially priced at Libor plus 340 bps and pricing can range from Libor plus 290 bps to 340 bps, depending on leverage.

And, the term loan B, the term loan C and the delayed-draw term loan are all priced at Libor plus 365 bps with a step down to Libor plus 340 bps at less than 7:1 total leverage, the filing added.

The commitment fee on the receivables-based revolver is 37.5 bps, the commitment fee on the revolver is 50 bps and the commitment fee on the delayed-draw term loan is 182.5 bps.

If availability under the receivables-based revolver is less than $750 million due to borrowing base limitations, the term loan A will be increased by the amount of such shortfall and the maximum availability under the receivables facility will be reduced by a corresponding amount.

The term loan C will be reduced by the net proceeds from sales of certain specified assets between March 27 and the closing date.

Of the total delayed-draw funds, $750 million can be used to purchase or repay Clear Channel's outstanding 7.65% senior notes due 2010 and the remainder will be available to purchase or repay Clear Channel's outstanding 4.25% senior notes due 2009.

The facility has a maximum consolidated senior secured net debt to adjusted EBITDA ratio requirement.

In addition to the credit facility, the company is getting $980 million of 10¾% senior unsecured notes and $1.33 billion of 11% cash pay/11¾% PIK senior unsecured toggle notes.

Proceeds from the debt will be used to help fund the buyout of Clear Channel.

The debt financing and the equity financing that will be used for the buyout have already been placed in escrow accounts.

Placement of financing into escrow accounts was part of a recent settlement agreement reached between the company, the equity sponsors and the banks in connection with lawsuits, under which Clear Channel accused the banks of refusing to execute necessary documents in an effort to cause the buyout to collapse.

Clear Channel is being purchased by Bain Capital Partners LLC and Thomas H. Lee Partners LP for $36.00 in cash or stock per share, in a transaction valued at about $17.9 billion. The purchase price was lowered from $39.20 per share in connection with the settlement agreement.

The transaction is expected to close by the end of the third quarter, subject to shareholder approval.

Clear Channel is a San Antonio media and entertainment company specializing in "gone from home" entertainment and information services.

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