Fitch downgrades iHeart

Fitch Ratings said it downgraded iHeartCommunications, Inc.'s long-term issuer default rating to C from CC and affirmed all of iHeart's individual issue ratings.

The agency also said it affirmed the issuer default ratings on Clear Channel Worldwide Holdings, Inc. and Clear Channel International BV at B.

Clear Channel and Clear Channel International are indirect, wholly-owned subsidiaries of Clear Channel Outdoor Holdings, Inc., iHeart's 89.9% owned outdoor advertising subsidiary, Fitch said.

The outlook is stable.

The downgrades reflect iHeart's recently proposed exchange offer targeting the 10% senior notes due Jan. 15, 2018, which the agency said it views as a distressed-debt exchange due to the proposed extension of the maturity, Fitch said.

The agency noted that the exchange offer provides existing holders of the 10% senior notes due 2018 an improved position in the capital structure, as the new notes would be subject to the same terms that govern the indenture for the existing 11¼% senior priority guarantee notes.

The agency said it will downgrade the issuer default rating to RD (restricted default) upon completion of the exchange.

The ratings consider a belief that iHeart's capital structure is unsustainable and that the company could pursue a broader restructuring of its capital structure over the near term, Fitch explained.

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