• Financial Times, Friday, June 5, 2009 9 AM

Some key lenders to the private equity groups that own Clear Channel Communications hope to drive the radio and outdoor advertising company toward default.

Clear Channel's owners have proposed a swap of some parent company debt for debt in Clear Channel Outdoor Holdings, its billboard division. However, some of Clear Channel's largest senior creditors are resisting, saying they would rather wait. They hope the company will violate its lending agreements, enabling lenders to force a default and to take control of the company's equity at a steep discount. The lender resistance indicates the diminished power of even the largest private equity groups.

The debt exchange efforts pit private equity owners Bain Capital and Thomas H Lee Partners against lenders, including Apollo Management, Blackstone's GSO and Centerbridge Partners. Bain and TH Lee own about $2.5 billion of senior debt and intend to throw their weight behind the proposed exchange.

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