CCO 7½ 06/01/2029

Clear Channel Outdoor Holdings Inc

Credit, TMT


Publicly traded companies mentioned herein: Clear Channel Outdoor Holdings Inc (CCO), Lamar Advertising Co (LAMR), Outfront Media Inc (OUT)

Highlights

The presenter is long the 2029 7.5% senior notes issued by Clear Channel Outdoor Holdings Inc (CCO 7 ½ 06/01/2029), an out of home (OOH) advertising company that he feels has an enticing capital structure. The company’s equity profile is low with a $650MM market cap that sits below $5.2B of debt. The presenter is bullish about CCO’s creditworthiness as it grows revenue 16% YoY to $2.6B, has $570MM of EBITDA and is breakeven on FCF with a path for $350MM of FCF accretion over the next 2 years. The company’s growth will be fueled by the recovery of its US advertising market, where it is already outpacing peers Lamar and Outfront in terms of margin recovery, as well as the estimated $1.3B that CCO will generate from the divestiture of its EU assets that can be put towards capex and to pay down its first lien international notes. CCO’s 2029 bonds currently trade at 27% discount to par with a 14% YTW, and the presenter sees a clear path to trade at 9% discount to par, creating a 35% return over the next year. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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