The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by CCU’s parent, Clear Channel Capital I, LLC, and all of CCU’s existing and future domestic wholly-owned restricted subsidiaries. The Notes and the related guarantees are secured by (1) a lien on (a) the capital stock of CCU and (b) certain property and related assets that do not constitute “principal property” (as defined in the indenture governing certain existing senior notes of CCU), in each case equal in priority to the liens securing the obligations under CCU’s cash flow credit facilities and existing priority guarantee notes and (2) a lien on the accounts receivable and related assets securing CCU’s receivables based credit facility junior in priority to the lien securing CCU’s obligations thereunder. In addition to the collateral granted to secure the Notes, the collateral agent and the trustee for the Notes entered into an agreement with the administrative agent for the lenders under the cash flow credit facilities to share in a certain percentage of any proceeds realized on collateral consisting of principal properties. The indenture governing the Notes contains a “most favored nation” provision that provides that if the Company issues debt securities in future debt exchange offers that contain certain specified terms that are more favorable to holders of those debt securities than the corresponding provisions applicable to holders of the Notes, the Company will be required to offer to exchange all of the Notes for the same debt securities.
“We are pleased with the success of this debt transaction and gratified that it was so significantly oversubscribed,” said Tom Casey, Executive Vice President and Chief Financial Officer. “We appreciate the support from our sponsors and our lenders for the amendments to our credit facilities that made this transformational transaction possible. As the latest step in our continuing refinancing strategy, it will also provide us greater flexibility to manage our debt maturities in the future. We believe that this transaction reflects investor confidence in the Company’s business strategy and performance.”