This excerpt taken from the CCO 8-K filed Dec 18, 2009.
THE PRIOR TERM NOTE PREPAYMENT AND THE TRANSACTIONS
On or prior to the date of this offering circular, Clear Channel Outdoor Holdings made a demand for and received repayment of $500.0 million due to it from Clear Channel Communications pursuant to the terms of the CCU Cash Management Note. Following such repayment, Clear Channel Outdoor Holdings contributed $500.0 million to the capital of CCOI, which used the proceeds received by it to prepay $500.0 million of the CCU Intercompany Note. Following the Prior Term Note Prepayment, the outstanding balance of the CCU Intercompany Note is $2.0 billion.
The proceeds of the notes offered hereby will be loaned to CCOI, which will (i) pay the fees and expenses of the offering, (ii) fund $50.0 million of the Liquidity Amount and (iii) make a voluntary prepayment of $2.0 billion (which is equal to the aggregate principal amount of the Series B Notes) to Clear Channel Communications to prepay in full and retire the CCU Intercompany Note, with the balance of the proceeds available to CCOI for general corporate purposes. In this regard, the board of directors could use all or a portion of the remaining proceeds for the payment of dividends to its shareholders, including Clear Channel Communications, and is not prohibited from doing so by the terms of any of its loan agreements or credit facilities. In addition, Clear Channel Communications and Clear Channel Outdoor Holdings will modify the terms of the Cash Management Notes to extend the maturity of each Cash Management Note to coincide with the maturity date of the notes offered hereby and to change the interest rate on each Cash Management Note to equal the variable per annum rate of interest equal to the weighted-average interest rate on the notes offered hereby.
Clear Channel Communications has advised us that it will apply $2.0 billion of the cash proceeds that it receives from the prepayment of the CCU Intercompany Note (which amount is equal to the aggregate principal amount of the Series B Notes) to repay an equal amount of indebtedness under its senior secured credit facilities.