Clear Channel Lenders Quickly Becoming Vultures

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Is Clear Channel almost certainly doomed to default?

According to the Financial Times, lenders behind the heavily-leveraged buyout are now rejecting a debt swap designed to keep the company solvent.  Instead, the lending group is preferring to drive Clear Channel past debt covenants and into default, and scoop significant ownership percentages at distressed rates.

Clear Channel was purchased for $23.8 billion by private equity players Bain Capital and Thomas H. Lee Partners, a deal that almost splintered apart before legal pressure forced the buyout.  Now, the private equity team and its lenders are dealing with a soiled bed, and debt holders like Apollo Management and OakTree Capital could gain by grabbing and selling a carcass.  The current deal being rejected would swap debt in the mainline Clear Channel Communications for Clear Channel Outdoor Holdings, a more premium division.

Clear Channel Communications is the largest US-based radio conglomerate, and Clear Channel Outdoor Holdings is the top billboard company.