It looks like Clear Channel's proposed debt exchange may not be happening after its outdoor unit could not find an attractive deal for its $3 billion debt offering. Three weeks ago, the company's outdoor unit began pre-marketing the $3 billion bond sale. However, the New York Post reported that some big-name buyers declined to take an interest, so company representatives stopped making phone calls about the proposed deal. However, a source close to Clear Channel says that the company is still generating cash and is continuing to pursue several opportunities to restructure its debt. The source said there were, in fact, takers for the bond offer, but none of the cost structures that were proposed appealed to Clear Channel at this time. The company may still do a bond deal, or it may examine other options.

With Clear Channel carrying the load of about $22 billion in total debts, the company said in June that it wanted to reposition the debt between its radio and billboard divisions. However, the lenders who financed the private equity acquisition of the company said they would block the move because they would rather wait on it in hopes that Clear Channel violates its lending agreements. That way the lenders can take control of its assets at a discount and then sell them. The lenders reportedly feel that this is the way to get the most amount of money back from the loans they made when Bain Capital and Thomas H. Lee Partners acquired Clear Channel in 2008.

Now the company could be vulnerable to defaulting on its debt load in the fourth quarter unless it renegotiates with its lenders or raises cash. Clear Channel owns 89 percent of publicly traded Clear Channel Outdoor, and the outdoor business owes Clear Channel $2.5 billion. The debt it tried to raise would have been used to repay Clear Channel, and increase the parent company's ability to stay in loan compliance. However, even if Clear Channel Outdoor was able to raise the cash through a debt offering, some shareholders are protesting the outdoor unit being used to help solve the parent company's woes, says the Post. One shareholder believes the debt offering impairs the company and that Clear Channel must stop using the outdoor unit's cash to help fund its operations.

Last week, an article in the San Antonio Express-News said that analysts believe Clear Channel will have trouble making the scheduled payments to its lenders later this year, and that it may have to consider selling more radio stations in order to raise cash.