Clear Channel’s $17.9B in bonds have been downgraded again due to concern they may breach the terms of the rules for the bonds, which would put them into default (even if they can make the interest payments).
Clear Channel used that money last year to “go private” and buy out the existing stockholders. The private equity firm involved had to sue the banks that had promised to buy up the bonds because the radio business turned sour while the protracted process of getting FCC and other approvals went on. As a result, by the time the deal was done, the bonds were not worth buying at face value. The bonds are now trading at $.45 on the dollar… see this story for more details.
The Democrats are making lots of noise about “localism”, which is aimed right at Clear Channel. While they are partly talking about Rush Limbaugh, many Clear Channel stations run mostly syndicated programming or computer automation most of the day. If the FCC pushes the localism agenda (or is pushed into by Congress), Clear Channel’s future gets very murky. Even after divesting the stations to get FCC approval and dumping most of the stations in smaller markets, they still own and operate about 800 radio stations.