Moody's rates Entravision bonds B1

Moody's Investors Services said it affirmed the B1 corporate family rating for Entravision Communications Corp. and assigned a B1 (LGD 4, 51%) rating to its proposed $385 million issuance of senior secured bonds. The agency also said it raised the probability of default rating to B1 from B2, based on the company's good pro forma liquidity profile and its revised capital structure.

The company will use proceeds to repay its existing first-lien term loan with about $359 million outstanding and fund the termination of unprofitable swaps and transaction fees.

The transaction modestly increases leverage, and Moody's said it continues to consider the company as being weakly positioned relative to its rating.

However, the extension of maturities to 2017 for the proposed bonds from March 2013 for the existing term loan mitigates refinancing risk, the agency said, and estimated cash interest expense will increase only modestly relative to 2009 given the elimination of unfavorable swaps.

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