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Clear Channel Looks to Restructure $18B Debt

Clear Channel Communications has begun quietly negotiating with lenders about restructuring its massive debt load. Just nine months ago the company was acquired in a $27 billion leveraged buyout.

Among the topics possibly being discussed by the radio and billboard giant is a pre-packaged bankruptcy or a group of senior lenders trading debt for assets. Analysts watching Clear Channel have expressed concern that the company could violate its loan terms later this year.

What Clear Channel has in its favor is that it owes senior lenders $16 billion of its $18 billion in long-term debt, and for the most part the senior lenders may not be interested in forcing a bankruptcy. Also, Clear Channel owners THL Partners and Bain Capital own debt in the company, and likely do not want to foreclose on the business. The company has $1.6 billion in cash, which will last 18 months at its current burn-through rate, say insiders.

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