Clear Channel Outdoor Holdings, Inc. Announces Proposed Private Offering of Senior Secured Notes

Rhea-AI Summary

Clear Channel Outdoor Holdings, Inc. announces a private offering of $865 million Senior Secured Notes due 2030, part of a refinancing transaction to extend maturity and prepay existing borrowings. The offering is exempt from registration under the Securities Act, targeting qualified institutional buyers.

Financial Analyst

The issuance of $865 million in Senior Secured Notes by Clear Channel Outdoor Holdings is a significant move aimed at restructuring the company's debt profile. By securing these notes against the company's assets, they are providing investors with a tangible security interest, potentially lowering the cost of capital compared to unsecured debt. The decision to refinance, particularly the extension of the maturity of term loan B from 2026 to 2028, indicates a proactive approach to managing the company's liabilities and improving its financial flexibility.

Investors should note that the use of proceeds to prepay existing debt could be accretive to the company's creditworthiness by reducing the overall debt burden. However, attention must be paid to the terms of the refinancing, as extending maturities can also lead to increased total interest payments over time. Moreover, the transaction fees and expenses associated with this refinancing should be weighed against the potential interest savings.

Legal Expert

The private offering of the Notes, exempt from registration under the Securities Act of 1933, is targeted at qualified institutional buyers and complies with Regulation S for international investors. This approach enables the company to expedite the capital-raising process without the additional disclosures and time involved in a public offering. However, it limits the pool of potential investors to a more sophisticated audience.

It's also important to understand the implications of the first-priority and second-priority security interests in the company's assets. This structure indicates a clear hierarchy for claimants in the event of default, which is a critical consideration for potential investors assessing the risk profile of the Notes. The exclusion of accounts receivable and related assets from the first-priority security interest is a notable point that could affect the recovery rate in a default scenario.

Market Research Analyst

Clear Channel Outdoor Holdings' strategic refinancing move needs to be contextualized within the broader advertising market and economic conditions. As a player in the outdoor advertising space, the company's financial restructuring could be a response to industry-specific challenges such as the shift to digital advertising or broader economic headwinds impacting advertising budgets.

Analyzing the potential impact on the company's stock, the market will likely react to this news based on the perceived improvement in the company's debt profile and the implications for future cash flows. If the market views this refinancing as a positive step towards financial stability, it could lead to an uptick in investor confidence. Conversely, if the market interprets this as a sign of financial distress or a mere postponement of debt obligations, it could negatively impact the company's stock valuation.

SAN ANTONIO, Feb. 26, 2024 /PRNewswire/ -- Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) (the "Company") announced today that it will offer, subject to market and customary conditions, $865,000,000 aggregate principal amount of Senior Secured Notes due 2030 (the "Notes") in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act").

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 will be 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 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.

While the Company plans to present at J.P. Morgan's 2024 Global High Yield & Leveraged Finance Conference on February 27, 2024, in light of the offering of the Notes, the Company no longer plans to make available on its investor website a live audio webcast or a replay of its presentation.

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 or not the offering will be consummated and the terms, size, timing and use of proceeds of the offering of the Notes as well as any amendment to the Company's existing senior secured credit facilities. 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 Clear Channel Outdoor Holdings, Inc. announcing?

Clear Channel Outdoor Holdings, Inc. announced a private offering of $865 million Senior Secured Notes due 2030.

What is the purpose of the offering?

The offering is part of a refinancing transaction to extend the maturity of the Company's term loan B facility from 2026 to 2028 and to prepay existing borrowings.

Who are the Notes guaranteed by?

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

How will the proceeds from the Notes be used?

The Company intends to use the proceeds to prepay a portion of the borrowings outstanding under its existing senior secured term loan facility and to pay related transaction fees and expenses.

How are the Notes being offered?

The Notes and related guarantees will be offered only to qualified institutional buyers in reliance on the exemption from registration under Rule 144A under the Securities Act.