Business Context and Reporting Period
This Form 8-K is filed by CC Media Holdings, Inc. (parent of Clear Channel Communications, Inc.) on June 8, 2011. The report discloses a planned private offering of debt securities and a related voluntary paydown of an existing credit facility.
Key Financial Metrics
- Proposed Debt Offering: $750 million aggregate principal amount of 9.0% priority guarantee notes due 2021.
- Existing Credit Facility: $320.7 million outstanding under a receivables-based credit facility as of March 31, 2011.
- Liquidity Action: The company intends to use cash on hand to voluntarily pay down the entire $320.7 million outstanding balance prior to completing the new note offering.
Material Changes
The filing announces a material change in the company's capital structure plans. Clear Channel Communications, Inc. intends to issue an additional $750 million in notes with terms identical to the $1.0 billion of 9.0% notes issued on February 23, 2011. These new notes will be treated as a single class with the existing notes. Additionally, the company plans to eliminate its current outstanding balance on its receivables-based credit facility.
Guidance, Outlook, and Risks
Offering Conditions: The $750 million offering is subject to market and other conditions. It will be conducted as a private offering to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S. The notes will not be registered under the Securities Act.
Facility Status: The voluntary paydown of the credit facility will not reduce the company's commitments under the facility, and the company retains the ability to reborrow at any time.
Legal Disclaimer: This report is not an offer to sell or a solicitation of an offer to buy the notes.
Investor Verification Checklist
- Verify the final terms and pricing of the $750 million 9.0% notes due 2021 once the offering is completed.
- Confirm the execution of the voluntary paydown of the $320.7 million receivables-based credit facility.
- Review the press release (Exhibit 99.1) for specific details on the use of proceeds and market conditions affecting the offering.
- Monitor future filings for the official closing of the private placement and any changes to the credit facility utilization.