Clear Channel's Rtgs on S&PWatch Neg,Jacor's Watch Pos.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/8/98-- Standard & Poor's today placed its triple-'B'-minus corporate credit, senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , and bank loan ratings of Clear Channel Communications Not to be confused with clear channel radio stations, which are AM radio stations with certain technical parameters. Clear Channel Communications (NYSE: CCU) is a media conglomerate company based in the United States. , Inc. on CreditWatch with negative implications, following the announcement of the company's proposed merger with Jacor Communications, Inc. for $4.4 billion in stock and pre-existing Jacor debt. At the same time, the double-'B'-minus corporate credit and bank loan ratings, as well as the single-'B' subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". rating, of Jacor Communications Inc. were placed on CreditWatch with positive implications. The single-'B' rating on Jacor Communications Co.'s subordinated notes (guaranteed by Jacor Communications Inc.) also was placed on CreditWatch with positive implications, as were the double-'B'-minus corporate credit and bank loan ratings for the company. The CreditWatch placement for Clear Channel's ratings reflects the increase in financial risk upon the expected completion of the merger in the third quarter of 1999. Standard & Poor's anticipates that pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma total debt to earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) will be somewhat higher than levels more appropriate for the ratings (less than 3.75 times). Further concern surrounds the timeframe for improving the performance of many Jacor radio stations that have kept Jacor's EBITDA margins at subpar sub·par adj. 1. Not measuring up to traditional standards of performance, value, or production. 2. Below par in a hole, round, or game of golf. levels of around 30%. Offsetting these issues are the use of equity in the transaction and longer-term expected operating benefits. Jacor dramatically increases Clear Channel's market reach in radio broadcasting with a minimum of overlap requiring only modest divestitures. In many markets, the combined companies will have a greater presence across TV, radio, and outdoor advertising, with potential revenue growth and expense reduction opportunities. Clear Channel has historically observed moderate financial policies and has made significant use of equity in building a strong, diversified media business. Standard & Poor's will meet with management to discuss strategies that the company may consider to mitigate the financial risk of the transaction.---CreditWire |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion