A restructuring of radio broadcaster Clear Channel Communications is inevitable, though its private equity owners Bain Capital and Thomas H. Lee Partners may try to delay it as long as possible, Moody’s Investors Service said in a new report. While Clear Channel could issue additional debt through its outdoor unit to make it through 2014, that would only postpone a restructuring by a couple of years, Moody’s analyst and lead author Neil Begley said.
The company will still face a critical hurdle in 2016, when about $13.8 billion of debt comes due, and leverage is expected to remain too high to attract more investment and refinance the debt, Moody’s said.”It is clear under our assumptions for operating improvement and valuation multiples that the company’s debt levels are unmanageable and unrefinancable,” the rating agency said. A spokesman for Bain Capital declined comment. A spokesman for Thomas H.
Lee could not immediately be reached for comment. Laden with nearly $16 billion in additional debt by its 2008 buyout, Clear Channel then faced tumbling advertising revenues amid one of the worst consumer-led recessions in recent history, Moody’s said.