iHeartMedia 2010 Annual Report Download - page 95

CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
and existing and future debt to the extent that such debt is not guaranteed by the guarantors of the senior cash pay notes and senior
toggle notes. The senior cash pay notes and senior toggle notes and the guarantees are effectively subordinated to the Company’s
existing and future secured debt and that of the guarantors to the extent of the value of the assets securing such indebtedness and are
structurally subordinated to all obligations of subsidiaries that do not guarantee the senior cash pay notes and senior toggle notes.
On July 16, 2010, Clear Channel made the election to pay interest on the senior toggle notes entirely in cash, effective for the interest
period commencing August 1, 2010. Assuming the cash interest election remains in effect for the remaining term of the notes, Clear
Channel will be contractually obligated to make a payment to bondholders of $57.4 million on August 1, 2013.
Clear Channel Senior Notes
As of December 31, 2010, Clear Channel’s senior notes and debentures represented approximately $2.9 billion of aggregate principal
amount of indebtedness outstanding.
The senior notes and debentures were the obligations of Clear Channel prior to the merger. The senior notes and debentures are
senior, unsecured obligations that are effectively subordinated to the Company’s secured indebtedness to the extent of the value of the
assets securing such indebtedness and the guarantees of such indebtedness from the Company’s existing and future material wholly-
owned domestic restricted subsidiaries, subject to certain exceptions. The senior notes and debentures rank equally in right of
payment with all of the Company’s existing and future senior indebtedness and senior in right of payment to all existing and future
subordinated indebtedness. The senior notes and debentures are not guaranteed by Clear Channel’s subsidiaries.
Subsidiary Senior Notes
As of December 31, 2010, the Company had outstanding $2.5 billion aggregate principal amount of subsidiary senior notes, which
consisted of $500.0 million aggregate principal amount of Series A Senior Notes due 2017 (the “Series A Notes”) and $2.0 billion
aggregate principal amount of Series B Senior Notes due 2017 (the “Series B Notes”). The subsidiary senior notes were issued by
Clear Channel Worldwide Holdings, Inc. (“CCWH”) and are guaranteed by CCOH, Clear Channel Outdoor, Inc. (“CCOI”) and
certain of CCOH’s direct and indirect subsidiaries.
The subsidiary senior notes bear interest on a daily basis and contain customary provisions, including covenants requiring the
Company to maintain certain levels of credit availability and limitations on incurring additional debt.
The subsidiary senior notes are senior obligations that rank pari passu in right of payment to all unsubordinated indebtedness of
CCWH and the guarantees of the subsidiary senior notes rank pari passu in right of payment to all unsubordinated indebtedness of the
guarantors.
The indentures governing the subsidiary senior notes require the Company to maintain at least $100 million in cash or other liquid
assets or have cash available to be borrowed under committed credit facilities consisting of (i) $50.0 million at the issuer and
guarantor entities (principally the Americas outdoor segment) and (ii) $50.0 million at the non-guarantor subsidiaries (principally the
International outdoor segment) (together the “Liquidity Amount”), in each case under the sole control of the relevant entity. In the
event of a bankruptcy, liquidation, dissolution, reorganization, or similar proceeding of Clear Channel, for the period thereafter that is
the shorter of such proceeding and 60 days, the Liquidity Amount shall be reduced to $50.0 million, with a $25.0 million requirement
at the issuer and guarantor entities and a $25.0 million requirement at the non-guarantor subsidiaries.
In addition, interest on the subsidiary senior notes accrues daily and is payable into an account established by the trustee for the
benefit of the bondholders (the “Trustee Account”). Failure to make daily payment on any day does not constitute an event of default
so long as (a) no payment or other transfer by CCOH or any of its subsidiaries shall have been made on such day under the cash
management sweep with Clear Channel and (b) on each semiannual interest payment date the aggregate amount of funds in the
Trustee Account is equal to at least the aggregate amount of accrued and unpaid interest on the subsidiary senior notes.
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