Clear Channel Communications, a major radio, television and outdoor advertising company, said it plans to sell a minimum of "$1 billion of bonds and use the proceeds to reduce amounts outstanding under its domestic credit facilities."
Clear Channel is preparing to purchase SFX Entertainment later this year.
The bond sale by San Antonio-based Clear Channel includes "a minimum $500 million of five-year notes and $500 million of notes carrying one or more maturities of five years or less."
An SFX statement indicates that Credit Suisse First Boston and Salomon Smith Barney will arrange the sale, but the timing of the offer was not specified.
On Wall Street last February, Moody's Investors Service affirmed (with a positive outlook) its "Baa3 senior unsecured rating," its lowest investment grade, for Clear Channel's existing senior unsecured debt. The same day, Feb. 29, Standard & Poor's affirmed its "BBB-minus rating" for the debt, also its lowest investment grade, and revised its rating outlook to stable from negative. The agencies acted after Clear Channel announced its plan to buy SFX Entertainment in a $4.4 billion stock swap deal. Clear Channel points out that its bond sale comes "in a U.S. investment grade corporate bond market that has absorbed more than $48 billion of new bonds in the last month, including a record $19.15 billion last week."
SFX develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets. An integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally, SFX has 122 venues overall, and owns or operates venues in 31 of the top 50 domestic markets.
Once Clear Channel finalizes two outstanding deals -- its $14 billion deal to purchase AMFM and the subsequent $4.4 stock swap deal for SFX -- the company will operate a total of 874 radio and 19 television stations in the United States and will have equity interests in over 240 radio stations around the world. In its other significant business, Clear Channel operates more than 550,000 outdoor advertising displays,including billboards, street furniture and transit panels.
-- By Murdoch McBride