Clear Channel sets new pricing on tender offer for AMFM's 8% notes

By Susanna Moon

Chicago, July 28 - Clear Channel Communications, Inc. said it priced its tender offer for subsidiary AMFM Operating Inc.'s 8% senior notes due 2008.

The company said it would pay $1,013.92 plus par per $1,000 principal amount of notes. The tender offer yield is 2.411%.

Citi priced the notes on 2 p.m. ET on July 28 using the yield on the 4 7/8% U.S. Treasury notes due Oct. 31 plus a fixed spread of 75 basis points.

As of 5 p.m. on July 28, AMFM had received tenders for $639 million principal amount of the notes, or 99% of the total outstanding amount.

The offer is scheduled to expire at 8 a.m. ET on July 30, 2008 and the consent payment deadline is 8 a.m. ET on July 30. The payment date is expected to be July 30.

The payment date is expected to be July 30.

On July 2, Clear Channel extended the tender expiration and consent deadline for the 8% notes from July 3. The offer was originally set to expire on Jan. 16 and has been pushed back 17 times since then.

The company said when pricing was first set that noteholders would receive $1,034.10 plus accrued interest for each $1,000 principal amount of 8% notes. The payout includes a consent payment of $30.00.

AMFM had received tenders and consents for $555.58 million, or 86.16%, of the notes as of Dec. 31, 2007.

As a result, the company expects 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 offer began on Dec. 17, 2007 and is 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 offer.

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 July 2, the company said its shareholders will vote on the merger at a special meeting on July 24 and that the merger is expected to close on July 30. The outside date for completion of the merger remains Dec. 31.

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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