New York -- An equity firm may go to court to force hesitant banks to finance the purchase of San Antonio, Texas, radio broadcaster Clear Channel, sources said Wednesday.
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Buyers Bain Capital and Thomas H. Lee Partners and Clear Channel might take the action together to scrap up $20 billion in debt needed to complete the $19.5 billion sale of the business, The New York Times reported.
Lenders Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, the Royal Bank of Scotland and Wachovia are all possible targets for the suit, the report said.
Banks currently hold $130 billion in unsold debt from deals already completed, forcing them to accept billions in write-down losses.
The credit crunch has turned a two-year buyers boom into a big deal drought.
The Times said banks would likely lose $3 billion by financing the Clear Channel deal, based on the gap in buyout-related debt trading in the current market.
Copyright 2008 by United Press International.