iHeartMedia is widely expected to trigger a default on its $6.3 billion of Clear Channel term loans D and E after the company yesterday disclosed that it has elected not to make a $106 million Feb. 1 interest payment due to bondholders.
Hypothetically speaking, a default by Clear Channel would push the current 12-month default rate of the S&P/LSTA Leveraged Loan Index, which tracks U.S. credits, to a near-three-year high of 2.67%, from 1.94% currently.
A default by iHeart would displace Idearc as the fifth-largest default among the constituents of the S&P/LSTA Leveraged Loan Index.
The historical norm for the U.S. leveraged loan default rate is 3.1%, according to LCD. – Rachelle Kakouris
LCD comps is an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.