Moody's downgrades Scripps

Moody's Investors Service said it downgraded E.W. Scripps Co.'s corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD.

Moody's also said it downgraded the rating on the company's senior secured bank credit facility to Ba3 (LGD 3) from Baa3 (LGD 2) and its senior unsecured notes to B3 (LGD 3) from B1 (LGD 3).

The senior secured bank credit facility includes the planned incremental term loan to fund the acquisition of Cordillera Communications.

The SGL-2 speculative grade liquidity rating also was affirmed.

The outlook is stable.

The action follows the news that the company entered into an exclusive agreement to acquire eight TV stations that are being divested as part of the Nexstar Broadcasting, Inc., Moody's said.

Scripps is planning to fund the acquisition through a $580 million term loan, which will be incremental to the $525 million term loan announced at the time of the Cordillera acquisition, the agency said.

The downgrades reflect an expectation that Scripps' two year average leverage will be well above 6x at year-end 2019, compared to guidance of 4.25x guidance for the Ba3 rating, Moody's said.

The ratings reflect the company's very high-margin retransmission fees, strong local news programming and audience share and good free cash flow generation, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.