S&P upgrades E.W. Scripps, loan

Standard & Poor's said it removed its ratings on E.W. Scripps Co. from CreditWatch positive, where they were placed on July 31, 2014, and raised the corporate credit rating to BB from BB-.

The outlook is stable.

The agency also raised its issue-level rating on the company's senior secured credit facility, which includes the upsized term loan B due 2020, to BBB- from BB+. The 1 recovery rating remains unchanged, indicating an expectation for very high recovery (90%-100%) of principal in the event of a payment default.

Proceeds will be used to refinance Journal Communications Inc.'s (not rated) existing bank debt and pay a one-time/special $60 million dividend to shareholders.

On July 31, 2014, Scripps announced that it entered into a definite agreement to merge with Journal Communications and then spin off the combined companies' newspaper businesses into a separate independent company. S&P expects the transaction to close sometime in the second quarter of 2015.

"The upgrade results from our view that the Journal Communications transaction will improve Scripps' business risk profile, and, as a result, we revised our business risk profile assessment to 'fair' from 'weak,'" S&P credit analyst Naveen Sarma said in a news release.

"We believe that Scripps acquisition of Journal Communications' TV and radio stations improves its scale and operating profitability and provides opportunities to further expand its EBITDA margins."

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