OREANDA-NEWS. Fitch Ratings has affirmed iHeart Communications, Inc.'s (iHeart) 'CCC' Issuer Default Ratings (IDR), Clear Channel Worldwide Holdings, Inc.'s (CCWW) 'B' IDR, and Clear Channel International B.V.'s (CCI) 'B' IDR. The Rating Outlooks for CCWW and CCI remain Stable. A complete list of ratings follows at the end of this release.

CCWW is an indirect, wholly-owned subsidiary of Clear Channel Outdoor Holdings, Inc. (CCOH), which is a 90%-owned subsidiary of iHeart and holds all of iHeart's outdoor assets. CCI is an indirect, wholly-owned subsidiary of CCWW and holds all of CCWW's international outdoor assets with the exception of certain Latin American entities and China.

KEY RATING DRIVERS
Leveraged Capital Structure: Fitch estimates iHeart's total and secured leverage of 11.6x and 7.2x, respectively, as of Sept. 30, 2015. Total leverage exceeds levels at the leveraged buyout, as minimal FCF has prevented debt reduction and EBITDA has not returned to pre-downturn levels.

Near Term Maturities Reduced: iHeart completed several transactions over the past 12 months (detailed below) which reduced near-term maturities and improved liquidity. The company has $193 million maturating in 2016, $190 million in 2017 (A/R facility maturity) and $930 million in 2018. The next maturity wall is now 2019 when $8.4 billion matures.

Limited Room for Deterioration: Although the company's recent capital raising transactions significantly reduced near-term maturities, the bond issuance resulted in a higher interest burden, which further reduced FCF. Fitch expects FCF to be negative over the next two years, primarily reflecting the interest burden associated with iHeart's capital structure. iHeart's operating performance is also hampered by significant secular headwinds within the radio segment. There is no room in the ratings for a significant deterioration in operations.

Capital Market Flexibility: Recent credit markets have been accommodating to iHeart and other highly leveraged issuers. However, the below investment grade capital markets have been under significant duress recently and their willingness to continue to accommodate highly levered credits is suspect. Regardless, even if the capital markets regained their footing, their flexibility would ultimately depend on iHeart's ability to reduce secured leverage to a level where lenders would be willing to recommit capital, which is likely below the 6x level at which the banks originally lent.

Other Levers To Address Debt: The company has additional levers available to address its near-term maturities, including $592 million of pro forma cash on hand as of Sept. 30, 2015 (includes iHeart's share of CCOH's two recent dividends) and additional non-core assets it could sell. The company's recent non-core asset sales (detailed below) were in line with Fitch's expectations that iHeart would utilize such levers to support its liquidity position.

Outdoor Subsidiary Ratings: CCWW's IDR considers its stand-alone credit and operating profile, as well as its legal and operational relationship with iHeart. CCWW is an indirect wholly-owned subsidiary of Clear Channel Outdoor Holdings, Inc. (CCOH), a 90.1%-owned subsidiary of iHeart that holds all of iHeart's outdoor assets. Although there is material protection for CCWW, iHeart is expected to continue to extract cash from the entity.

KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for iHeart include:
--iHeart continues to benefit from its strongly positioned radio portfolio, which generates growth in line or exceeding the overall radio sector while the Outdoors business continues to generate positive FCF pre dividend;
--Model does not assume material assets sales other than those already announced. Similarly, Fitch does not model any potential debt exchange;
--Fitch projects negative FCF of $225 million or greater per year during the rating horizon;
--Low cash balance in outer years will need to be made up with additional debt, asset sales, or operational improvements;
--Fitch does not expect a material amount of improvement of iHeart's credit profile or absolute debt reduction over the next several years, given the expected negative FCF.

RATING SENSITIVITIES
Negative: Cyclical or secular pressures on operating results that further weaken credit metrics or liquidity position could result in negative rating pressure. Additionally, indications that a distressed debt exchange is probable in the near term would also drive a downgrade.

Positive: Fitch's sensitivities do not currently anticipate a rating upgrade.

LIQUIDITY
Fitch believes that the recent series of transactions discussed above provides iHeart with sufficient runway through the 2017 maturities. As of Sept. 30, 2015, iHeart had approximately $209.9 million in cash excluding $172.9 million in cash held at CCOH (neither balances account for CCI's debt issuance). Pro forma for CCOH's recent dividends, Fitch estimates cash balances of approximately $592 million. Backup liquidity consists of the ABL facility that matures in December 2017.

iHeart completed several transactions over the past 12 months to manage near-term maturities and improve liquidity:

--iHeart completed sale/leasebacks on 376 tower assets with Vertical Bridge Holdings, Inc. for total consideration of $375 million. There is a net negative operating effect of approximately $30 million per annum as the decrease in annual operating expenses is more than offset by a reduction in revenue and an increase in lease expense;
--On Dec. 16, 2015, CCI issued $225 million of 8.75% senior notes due 2020 with net proceeds indirectly funding a $218 million dividend to its shareholders, including $196 million to iHeart;
--On Jan. 7, 2016, Clear Channel Outdoor America (CCOA) closed on two transactions involving the sale of non-strategic outdoor assets to Lamar Advertising for total consideration of $458.5 million. CCOA is a wholly-owned operating segment of CCOH. Following the sale, CCOH paid a $540 million dividend to its shareholders, funded with a portion of net sale proceeds and a $300 million repayment from iHeart to CCOH under an intercompany revolving promissory note. iHeart's portion of the dividend was $186 million net of its $300 million repayment under the intercompany revolving promissory note;
--On Feb. 26, 2015, iHeart issued $950 million of 10.625% priority guarantee notes due 2023. Net proceeds were used to fully repay term loan B outstandings of $916 million and term loan C outstandings of $15 million.

Pro forma for the CCI debt issuance, as of Sept. 30, 2015, iHeart had approximately $21 billion in consolidated debt.

Debt held at iHeart at Sept. 30, 2015 was $15.9 billion and consisted of:
--$6.3 billion secured term loans due 2019;
--$190 million secured receivable based credit facility due 2017;
--$6.3 billion secured PGNs, maturing 2019-2023;
--$1.7 billion in senior unsecured 12% cash pay / 2% PIK notes maturing in February 2021 (net of FinCo holdings of $432 million);
--$730 million senior unsecured 10% notes due 2018 (net of FinCo holdings of $120 million);
--$668 million senior unsecured legacy notes, with maturities of 2016-2027 (net of FinCo holdings of $57 million.)

Debt held at CCWW was $4.9 billion and consisted of:
--$2.7 billion in senior unsecured 6.5% notes due 2022;
--$2.2 billion in subordinated 7.625% notes due 2020.

Debt held at CCI consisted of:
--$225 million of senior unsecured 8.75% notes due 2020

FULL LIST OF RATING ACTIONS

Fitch has affirmed the following ratings:

iHeartCommunications, Inc.
--Long-term IDR at 'CCC';
--Senior secured term loans at 'CCC/RR4';
--Senior secured priority guarantee notes at 'CCC/RR4';
--Senior unsecured guarantee notes due 2021 at 'CC/RR6';
--Senior unsecured legacy notes at 'C/RR6'.

Clear Channel Worldwide Holdings, Inc.
--Long-term IDR at 'B';
--Senior unsecured notes at 'BB-/RR2';
--Senior subordinated notes at 'B-/RR5'.

Clear Channel International B.V.
--Long-term IDR at 'B';
--Senior unsecured notes at 'BB-/RR2'.

The Rating Outlooks are Stable for CCWH and CCI.