SAN ANTONIO, Feb. 1, 2021 /PRNewswire/ — Clear Channel Outdoor Holdings, Inc. (CCO) (the “Company”) announced today that it will offer, subject to market and customary conditions, $1,000,000,000 aggregate principal amount of Senior Notes due 2028 (the “Notes”) in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”).

The Notes will be guaranteed on a senior unsecured basis by certain of the Company’s wholly-owned existing and future domestic subsidiaries. Accordingly, the Notes (i) will rank pari passu in right of payment with all existing and future senior indebtedness of the Company, (ii) will be senior in right of payment to all of the future subordinated indebtedness of the Company and the guarantors; (iii) will be effectively subordinated to all of the Company’s existing and future indebtedness secured by a lien, to the extent of the value of such collateral and (iv) will be structurally subordinated to any existing and future obligations of any existing or future subsidiaries of the Company that do not guarantee the Notes, including all of the Company’s foreign subsidiaries.

The Company intends to use the proceeds from the Notes, together with cash on hand, to (i) cause Clear Channel Worldwide Holdings, Inc., a subsidiary of the Company, to redeem $940 million aggregate principal amount of its 9.25% Senior Notes due 2024 and (ii) pay related transaction fees and expenses.

The Notes and related guarantees will be offered only to persons reasonably believed to be “qualified institutional buyers” in reliance on the exemption from registration pursuant to Rule 144A under the Securities Act and to persons outside of the United States in compliance with Regulation S under the Securities Act.  The Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities and foreign securities laws.

Insider’s Take: The refinancing notice follows recent debt offerings from both Lamar and OUTFRONT.  Two likely reasons for the Clear Channel refinancing.  The first is to extend the maturity date on a debt tranche that is due to mature in 2024 until 2028.  The second, and probably more importantly, is to price the debt at a lower interest rate.  The current debt has an interest rate of 9.25%.  A reduction of 1% creates $10 million in cash flow to the company.  Both Lamar and OUTFRONT were able to get very favorable financing in the current market.  Clear Channel is leveraged at a higher rate, but should see some reduction.  We will update when the package is finalized.

Clear Channel Outdoor stock closed up 0.5%, Lamar up 3.5%, OUTFRONT up 0.7% and the S&P 500 up 1.6%.

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