Clear Channel again prolongs tender offers for 7.65% notes, 8% notes

By Angela McDaniels

Tacoma, Wash., June 11 - Clear Channel Communications, Inc. once more extended the tender offers and consent solicitations for its $750 million of 7.65% senior notes due 2010 and AMFM Operating Inc.'s $644.86 million 8% senior notes due 2008.

The tender offer expiration and consent deadline are now 8 a.m. ET on June 27.

The tender offer expiration was originally set for Jan. 16. It has been pushed back 15 times since then, most recently to June 11.

As previously announced, pricing was set at 2 p.m. ET on March 25.

For each $1,000 principal amount of notes, the company will pay $1,054.13 for the 7.65% notes and $1,034.10 for the 8% notes.

The payouts were calculated using 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 7/8% Treasury note due Sept. 15, 2010 and a fixed spread of 350 basis points for the 7.65% notes and the 4 7/8% Treasury note due Oct. 31, 2008 and 75 bps for the 8% notes, minus accrued interest up to but excluding the payment date.

Noteholders who tender will also receive accrued interest up to but excluding the payment date plus the included consent payment of $30.00 per $1,000 principal amount of notes..

Clear Channel said that as of June 11, holders had tendered about 99% of its 7.65% senior notes and 99% of AMFM's 8% senior notes. These figures compare with 99% of the 7.65% notes and 95% of the 8% notes on May 14.

The company had received tenders and consents for $710.73 million, or 94.76%, of its 7.65% notes as of Dec. 31, and subsidiary AMFM had received tenders and consents for $555.58 million, or 86.16%, of its 8% notes.

As a result, the companies expect to enter into supplemental indentures that will eliminate substantially all the restrictive covenants in the note indentures, eliminate the covenants regarding mergers and consolidations, eliminate some events of default and modify or eliminate certain other provisions, including some provisions relating to defeasance.

The amendments will become operative once the tendered notes are accepted for payment.

The tender offers began on Dec. 17 and are being held in connection with the previously announced merger of Clear Channel with BT Triple Crown Merger Co. Inc., which is an affiliate of a private equity group co-led by Bain Capital Partners, LLC and Thomas H. Lee Partners, LP. The merger had been expected to close in the first quarter and is not conditioned on the tender offers.

The completion of the offer is conditioned upon the satisfaction or waiver of all conditions of the plan of merger. On March 26, Clear Channel, joined by CC Media Holdings, Inc., filed suit against Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of Scotland and Wachovia, the banks that had committed to provide the debt financing for the merger.

On May 13, Clear Channel announced that it had reached a settlement and expected the merger to close by the end of the third quarter, pending shareholder approval.

On June 11, the company said that while the merger is still expected to close in the third quarter, the outside date for completion of the merger has been pushed back to Dec. 31, 2008.

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. (866 924-2200 or call collect 212 430-3774) is the information agent.

Clear Channel is a diversified media company based in San Antonio.

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