Clear Channel Outdoor Holdings, Inc. Announces Pricing of Senior Secured Notes Due 2030

Rhea-AI Summary

Clear Channel Outdoor Holdings, Inc. announced a $865 million offering of 7.875% Senior Secured Notes due 2030, part of a refinancing transaction to prepay existing borrowings and extend the maturity of term loan B facility.

Financial Analyst

The pricing of a substantial debt offering, such as Clear Channel Outdoor Holdings' $865 million in Senior Secured Notes, is a significant event for the company and its investors. The 7.875% interest rate on these notes is a critical figure, as it reflects the cost of capital for the company and influences its debt servicing obligations. Comparing this rate to the current yield curve and industry benchmarks is essential to assess the attractiveness of these notes to institutional investors and the implied risk as perceived by the market.

Furthermore, the refinancing transaction intended to extend the maturity of the company's term loan B facility from 2026 to 2028 suggests a strategic move to manage the company's debt profile and liquidity risks. The use of proceeds to prepay existing debt and cover transaction fees indicates an effort to optimize the capital structure and potentially improve financial flexibility. However, investors must consider the company's leverage and interest coverage ratios post-transaction to evaluate the impact on its financial health.

Legal Expert

In the context of securities law, the decision by Clear Channel Outdoor Holdings to offer the Notes to 'qualified institutional buyers' under Rule 144A and to non-U.S. persons under Regulation S is noteworthy. These exemptions allow the company to bypass the registration requirements under the Securities Act of 1933, which can expedite the offering process and reduce disclosure obligations. However, this also limits the potential buyer pool and necessitates a thorough understanding of the restrictions on resale, as the notes have not been registered.

It is also important to note that the security interests in the company's and guarantors' assets, including a first-priority basis for certain assets and a second-priority basis for accounts receivable, establish the collateral backing of the notes. The structuring of these security interests will significantly affect the recovery rate for investors in the event of default, which is a critical consideration for risk assessment.

Market Research Analyst

The announcement of the Senior Secured Notes offering by Clear Channel Outdoor Holdings provides insight into the company's market positioning and strategic initiatives. The fact that the offering is part of a broader refinancing strategy implies that the company is actively managing its debt in response to market conditions and its operational needs. The impact on the company's credit rating and investor perception will depend on the successful execution of the refinancing and the broader market's appetite for high-yield debt.

Investors and analysts should monitor the uptake of the offering and subsequent performance of the notes in the secondary market, as this will provide an indication of the market's confidence in the company's financial strategy and its ability to meet its debt obligations. Additionally, the broader economic context, including interest rate trends and the health of the advertising industry, which Clear Channel Outdoor Holdings operates within, will play a role in the long-term performance of the investment.

SAN ANTONIO, March 4, 2024 /PRNewswire/ -- Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) (the "Company") announced today that it priced an offering (the "Offering") of $865,000,000 aggregate principal amount of 7.875% Senior Secured Notes due 2030 (the "Notes"). The issuance and sale of the Notes is expected to be completed on March 18, 2024, subject to customary closing conditions.

The Notes will be guaranteed on a senior secured basis by certain of the Company's wholly owned domestic subsidiaries (the "Guarantors"). The Notes and the related guarantees will be secured, subject to permitted liens and certain other exceptions, on a first-priority basis by security interests in all of the Company's and the Guarantors' assets securing the Company's existing senior secured credit facilities and existing senior secured notes (other than accounts receivable and related assets securing the Company's existing receivables-based credit facility (the "Receivables Facility")) and, on a second-priority basis, by accounts receivable and related assets securing the Receivables Facility.

The Offering of the Notes is part of a refinancing transaction whereby the Company intends to enter into an amendment to its existing senior secured credit facilities, which is expected to extend the maturity of the Company's term loan B facility from 2026 to 2028, among other amendments. The Company expects to close this transaction concurrently with the closing of the Offering of the Notes. The closing of the Offering of the Notes is not conditioned on the closing of any amendment to the Company's existing senior secured credit facilities.

The Company intends to use the proceeds from the Notes to (i) prepay a portion of the borrowings outstanding under the Company's existing senior secured term loan facility (including accrued but unpaid interest related thereto) and (ii) pay related transaction fees and expenses.

The Notes and related guarantees are being offered only to persons reasonably believed to be "qualified institutional buyers" in reliance on the exemption from registration pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and, to persons outside of the United States, in compliance with Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act, and applicable state securities and foreign securities laws. This press release is for informational purposes only and shall not constitute an offer to sell nor the solicitation of an offer to buy the Notes or any other securities. The Offering is not being made to any person in any jurisdiction in which the offer, solicitation or sale is unlawful.

About Clear Channel Outdoor Holdings

The Company is at the forefront of driving innovation in the out-of-home advertising industry. The Company's dynamic advertising platform is broadening the pool of advertisers using its medium through the expansion of digital billboards and displays and the integration of data analytics and programmatic capabilities that deliver measurable campaigns that are simpler to buy. By leveraging the scale, reach and flexibility of its diverse portfolio of assets, the Company connects advertisers with millions of consumers every month across more than 330,000 print and digital displays in 19 countries, excluding countries held for sale.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this release constitute "forward-looking statements," including within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include, but are not limited to, all statements other than those made solely with respect to historical facts and include, but are not limited to, statements regarding the Offering and the anticipated terms and use of proceeds of the Notes. The words "will," "believe," "expect," "anticipate," "continue," "look forward to," "well-positioned to," "remains," "further," "estimate," "forecast," "goals," "targets" and similar words and expressions are intended to identify such forward-looking statements. In addition, numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, whether the Offering will be consummated and the timing and use of proceeds of the Offering. Many of the factors that will determine the outcome of the subject matter of this press release are beyond the Company's ability to control or predict. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE Clear Channel Outdoor Holdings, Inc.

What is the purpose of the $865 million offering announced by Clear Channel Outdoor Holdings, Inc.?

The purpose is to prepay a portion of existing borrowings under the senior secured term loan facility and pay related transaction fees and expenses.

When is the expected completion date for the issuance and sale of the Notes by Clear Channel Outdoor Holdings, Inc.?

The issuance and sale of the Notes are expected to be completed on March 18, 2024, subject to customary closing conditions.

Who will guarantee the Notes issued by Clear Channel Outdoor Holdings, Inc.?

The Notes will be guaranteed on a senior secured basis by certain of the Company's wholly owned domestic subsidiaries known as the Guarantors.

How are the Notes and related guarantees secured by Clear Channel Outdoor Holdings, Inc.?

The Notes and related guarantees will be secured by security interests in all of the Company's and the Guarantors' assets on a first-priority basis, subject to permitted liens and exceptions.

To whom are the Notes and related guarantees being offered by Clear Channel Outdoor Holdings, Inc.?

The Notes and related guarantees are being offered to qualified institutional buyers under Rule 144A and persons outside of the United States in compliance with Regulation S.