Moody’s cuts Scripps, facilities, notes

Moody's Investors Service said it downgrades E.W. Scripps Co.’s corporate family rating and probability of default ratings to Ba3 and Ba3-PD from previously Ba2 and Ba2-PD rating under review for downgrade (RUR).

The agency also downgraded the senior secured bank credit facilities to Baa3 (LGD2) from Baa2 (LGD1) RUR for downgrade and the senior unsecured notes to B1 (LGD5) from Ba2 (LGD4) RUR for downgrade.

The outlook is stable. This concludes the review that initiated on Aug. 2 following the company's announcement it planned to acquire Katz broadcast networks in a debt-financed transaction valued at $292 million.

“The announced transaction adds considerable leverage. We project pro forma leverage will be near 5.0x (Moody's adjusted Debt/2 year average EBITDA) at the end of 2017 and 2018,” Moody’s said in a news release.

“In addition, we believe the acquired assets are relatively weaker than Scripps' existing broadcast assets with lower margins.”

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