Clear Channel Facing 2016 Debt Issues
December 4, 2012

Clear Channel Communications is facing major debt issues in its future, as over $10 billion in debt is slated to come due in 2016. Moody's and Reuters report that this massive debt will be due without CC being forced into a restructuring of the company's balance sheet.

While Clear Channel has managed its short-term debt, by 2016 the media giant "will have debt levels that are greater than its expected asset value." According to Moody's analysts, "The possibility of a restructuring or a distressed exchange remains high." Also, Moody's believes that CC's "efforts to avoid a restructuring and refinance or extend its debt load will likely depend on the receptivity of the financial markets and moderate underlying interest rates."

In January 2016, $8.2 billion in bank debt will come due for CC, followed by another $1.9 billion later in the year. Moody's analyst Scott Van den Bosch says that if Clear Channel " is to have a realistic chance of refinancing $10.1 billion in debt in 2016, its operating performance will need to improve well above current levels."

Reuters notes that CC has made multiple moves in 2012 to reduce its debts and move maturing debt out of this year into the future, including Clear Channel Outdoor issuing new notes, allowing the company to make over $1.9 billion in cash to pay down debts that would have been due in 2014.

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Jon Zellner
EVP/Programming Operations

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