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TEXT-Fitch: Clear Channel ratings unaffected by increased offering
March 1, 2012 / 5:56 PM / 6 years ago

TEXT-Fitch: Clear Channel ratings unaffected by increased offering

 (The following statement was released by the rating agency)	
 March 1 - The ratings of Clear Channel Worldwide Holdings, Inc. (CCWW)
and Clear Channel Communications, Inc. (Clear Channel) are unaffected by the
upsizing of the CCWW senior subordinated notes issuance to $2.20 billion from
the originally proposed $1.25 billion. The Outlook on all the ratings is Stable.
Please see a full list of ratings at the end of this release.	
Fitch estimates that total leverage at CCWW will increase from the current 3.2 	
times (x) to 5.9x (under the leverage as defined under the bond indenture; Fitch	
estimates that total leverage is 3.5x, growing to 6.5x). CCWW's Issuer Default 	
Rating (IDR) had already incorporated Fitch's expectations that leverage would 	
migrate to this level. 	
The 'B+/RR3' rating on the subordinated notes is unaffected by the larger deal. 	
That said, there is very little flexibility within the RR3 rating category, and 	
any incremental debt would likely result in a downgrade of these notes.  	
Clear Channel will use the $1.9 billion dividend proceeds it receives to 	
permanently repay amounts drawn under its $1.9 billion revolving credit facility	
(RCF) maturing July 2014, including any amount drawn subsequent to Dec. 31, 	
2011. Fitch estimates that the transaction will reduce gross secured leverage at	
Clear Channel to 7.2x, from 7.9x at Dec. 31, 2011. Total consolidated leverage 	
(which includes CCWW) will increase 0.2x to 11.2x. 	
The upsized transaction is an incremental positive for Clear Channel, in that it	
further reduces the 2014 maturity wall to $1.5 billion. Fitch believes Clear 	
Channel could likely handle the $2.2 billion of combined legacy notes and bank 	
debt that mature 2012 - 2014 using a combination of cash on hand, cash swept 	
from CCOH that is held in Clear Channel's accounts and issuance out of Clear 	
For more information please see Fitch's press release 'Fitch Rates Clear Channel	
Worldwide's Sr. Subordinated Notes 'B+/RR3'; Outlook Stable' dated Feb. 28, 	
Fitch currently rates Clear Channel and CCWW as follows: 	
Clear Channel	
--Long-term IDR 'CCC';	
--Senior secured term loans and senior secured revolving credit facility (RCF) 	
--Senior unsecured leveraged buyout (LBO) notes 'C/RR6';	
--Senior unsecured legacy notes 'C/RR6'.	
--Long-Term IDR 'B';	
--Senior unsecured notes 'BB-/RR2'.	
--Senior subordinated notes 'B+/RR3';	
Additional information is available at ''. 	
Applicable Criteria and Related Research:	
--'Corporate Rating Methodology' (Aug. 12, 2011);	
--'Parent and Subsidiary Ratings Linkage' (Aug. 12, 2011);	
--'Distressed Debt Exchange Criteria' (Aug. 12, 2011);	
--'Evaluating Corporate Governance' (Dec. 13, 2011);    	
--'Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers' 	
(May 12, 2011).	
Applicable Criteria and Related Research: 	
Corporate Rating Methodology	
Parent and Subsidiary Rating Linkage 	
Distressed Debt Exchange Criteria for Structured Finance	
Evaluating Corporate Governance	
Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers	
 (New York Ratings Team)	

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