Clear Channel begins exchange offer for 10¾% notes, toggle notes

By Angela McDaniels

Tacoma, Wash., Nov. 25 - Clear Channel Communications, Inc. began a private exchange offer for its $448,128,000 of outstanding 10¾% senior cash pay notes due 2016 and $340,009,076 of outstanding 11%/11¾% senior toggle notes due 2016, according to a company news release.

The company is offering newly issued senior notes due Feb. 1, 2021 in exchange for the old notes. The new notes will be an add-on to the notes that were issued on June 21. They will accrue interest at the rate of 12% per year in cash and 2% per year in kind.

The early tender date is 5 p.m. ET on Dec. 9, and the exchange offer will expire at 11:59 p.m. ET on Dec. 23.

For each $1,000 principal amount of notes exchanged, holders who tender by the early tender date will receive $1,100 principal amount of new notes and $20 of cash. Holders who tender after the early tender date but by the offer expiration will receive $1,050 principal amount of new notes and $20.00 of cash.

In addition, if at least $375 million principal amount of outstanding notes have been tendered and not withdrawn on the early tender date, the company will pay an additional contingent cash payment of $20.00 per $1,000 principal amount of notes exchanged.

Holders will also receive accrued interest, if any, in cash up to but excluding the settlement date. However, because interest on the new notes will accrue from the last interest payment date of the existing 2021 notes, the cash portion (but not the PIK portion) of the interest accrued on the new notes from the last interest payment date up to but excluding the applicable settlement date will be deducted from the interest payable by Clear Channel on the outstanding notes.

Notes tendered on or prior to the early tender date will settle on or before the expiration date.

As previously reported, holders tendered $348,122,000 of the cash pay notes and $917,226,511 of the toggle notes in an exchange offer that ended on June 18. The company issued $1,200,991,648 of the senior notes due 2021 in the exchange.

The outstanding notes are, and the new notes will be, fully guaranteed on a senior basis by Clear Channel's parent, Clear Channel Capital I, LLC, and all of Clear Channel's existing domestic wholly owned restricted subsidiaries.

The exchange offer is only available to holders that have certified their status as both a qualified institutional buyer and an institutional accredited investor or not a U.S. person as those terms are defined under the Securities Act.

The exchange agent and information agent is Global Bondholder Services Corp.(866 470-3700 or, for banks and brokerage firms, 212 430-3774).

Clear Channel is a media and entertainment company based in San Antonio.

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