Clear Channel lenders threaten refinancing plan
Some of the largest lenders to the private equity groups that led the $23.8 billion buy-out of Clear Channel Communications intend to turn down a proposed debt exchange, hoping to drive the radio and outdoor advertising company towards default. Agreed at the peak of the credit markets in 2006, the original Clear Channel buy-out would have seen Bain and TH Lee put up only 6 per cent of the total value, making the purchase one of the most leveraged deals on record. Bad feeling between the banks and the sponsors once credit markets turned spilled into the courts. It took until July 2008 for the two sides to complete a deal on revised terms. Banks swiftly wrote down the value of the loans, selling some to Bain, TH Lee and to hedge funds.