Clear Channel, subsidiary tender for 7.65% notes, 8% notes

By Jennifer Chiou

New York, Dec. 17 - Clear Channel Communications, Inc. announced the start of a cash tender offer and consent solicitation for its $750 million of 7.65% senior notes due 2010.

Clear Channel also said that its subsidiary, AMFM Operating Inc., is beginning a cash tender offer and consent solicitation for its $644.86 million of 8% senior notes due 2008.

The offers are in connection with the previously announced merger with BT Triple Crown Merger Co., Inc. The merger is not conditioned on the tenders.

The companies are soliciting consents to amend the note indentures to eliminate substantially all of the restrictive covenants and the covenants regarding mergers and consolidations, to eliminate certain events of default, and to modify or eliminate certain other provisions, including certain provisions relating to defeasance.

For each $1,000 principal amount, the company will pay the sum of the present value of the notes on the maturity date plus the present value on the scheduled payment date of interest, discounted using the yield to maturity on the 3.875% Treasury due Sept. 15, 2010 and a fixed spread of 350 basis points for the 7.65% notes, and the 4.875% Treasury due Oct. 31, 2008 and 75 bps, minus accrued interest to, but not including, the payment date.

Those who tender by the consent deadline will receive the consent payment of $30.00 per $1,000 principal amount of notes.

The consent deadline is 5 p.m. ET on Dec. 31. The offers end at 8 a.m. ET on Jan. 16.

While Clear Channel's offer is not contingent on the receipt of the necessary consents, AMFM's offer is.

With closing of the merger, expected in the first quarter, Clear Channel said it expects to obtain $18.53 billion of new senior secured credit facilities, including a $1.25 billion term loan A facility, a $12.65 billion term loan B facility and a $2 billion term loan C facility to be funded at the closing of the merger, as well as a $2 billion revolving credit facility and a $625 million delayed-draw term loan facility.

Clear Channel also said it expects to issue $2.6 billion of new senior unsecured notes, including $1.1 billion of senior cash pay notes and $1.5 billion in senior pay-in-kind option notes.

Citi (800 558-3745 or call collect 212 723-6106) is the lead dealer manager and solicitation agent. Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are co-dealer managers and co-solicitation agents. Global Bondholder Services Corp. (call collect 212 430-3774 or 866 924-2200) is the information agent.

Clear Channel is a San Antonio media company.

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