Judge orders banks to fund Clear Channel deal
This is what I was talking about a couple of months ago. If the banks loose in court it would spell big problem for most investment banks. They all signed up for the debt assuming they’d be able to syndicate it after the transaction closed at a premium. Now they have all these liabilities, $400B worth, which they are contractually obliged to fund.
Oh, oh…
From Market Watch:
By Riley McDermid, MarketWatch Last update: 3:45 p.m. EDT March 27, 2008
NEW YORK (MarketWatch) — A Texas district court judge sided with Clear Channel Communications Inc. and ruled Thursday that a group of six investment banks cannot walk away from funding the $19 billion private-equity buyout of the nation’s largest radio-station owner.