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Moody's rates Radio One revolver B1, loan B2
Moody's Investors Service said it assigned a B1 (LGD 1, 0%) rating to Radio One, Inc.'s proposed $25 million first-out, first-lien revolver due 2015 and a B2 (LGD 2, 27%) rating to the company's new first-lien term loan due 2016.
Moody's also raised the company's probability of default rating to Caa1 from Caa2 and affirmed its Caa1 corporate family rating.
The outlook remains stable.
The proposed credit facilities replace the existing $385 million facilities with the increase in the term loan commitment used to fund the $13.7 million capital call related to TV One, the agency said.
The revision of the probability of default rating also results in an upgrade of the 12½%/15% subordinated notes due 2016 to Caa2 from Caa3, Moody's added.
The ratings reflect Radio One's high pro forma debt-to-EBITDA leverage of about 8x, mitigated by recently improved operating performance as a result of gains in national advertising in the fourth quarter of 2010, Moody's said.
Despite anticipated EBITDA growth and improving net debt-to-EBITDA leverage ratios for 2011, debt balances could increase by about $27 million over the next 12 months, the agency said.
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