CS looks to sell Clear Channel loans - source

MUNICH/NEW YORK, Feb 27 (Reuters) - Credit Suisse (CSGN.VX) has made inquiries into selling a share of its loans behind the pending $20 billion buyout of radio operator Clear Channel Communications Inc (CCU.N), a buyside source said on Wednesday.

The bank has called potential investors regarding a chunk of the loans and asked what price they would be interested in paying, the source said.

A sale by Credit Suisse could bypass a formal syndication process in which lenders make a unified effort to distribute their loans. If Credit Suisse does sell its loans unilaterally, the bank would break normal loan market practices with a potentially adverse effect on other lenders in the syndicate.

"We continue to work with the syndicate," said a Credit Suisse spokesman, who declined to comment on whether the bank had made separate inquiries into selling the loans.

Bids for leveraged loans, such as those used to finance buyouts, have tumbled with the ailing credit markets. The leveraged loans slated for sale, including nearly $53 billion of loans that banks failed to sell, stands at nearly $197 billion -- an increase of almost 23 percent over the last 12 months, according to Reuters Loan Pricing Corp.

Credit Suisse previously broke ranks with another group of lenders by unilaterally offering a share of its loans backing the buyout of Harrah's Entertainment Inc, according to media reports.

Shares of Clear Channel Communications, pressured by investor concerns that the deal may not go through, are trading at $33.43 -- well below the $39.20 per share offering price struck last year with private equity firms Thomas H. Lee and Bain Capital Partners.

The financing package backing Clear Channel's buyout consists of $18.525 billion in senior secured bank debt and $2.6 billion of new senior unsecured debt, according to public filings.

(Reporting by Megan Davies and Jonathan Keehner; additional reporting by Faris Khan, editing by Richard Chang)