Moody's cuts Regent loans to B2

Moody's Investors Service said it downgraded Regent Broadcasting, LLC's corporate family rating to B2 from B1 and probability-of-default rating to B3 from B2.

The agency also lowered to B2 from B1 (LGD3, 35%) ratings on the $75 million senior secured revolving credit facility, $50 million delayed draw term loan and $115 million senior secured term loan B.

According to Moody's, the downgrade reflects Regent's operating performance and credit metrics, secular pressure on the radio business and the lack of cushion under financial covenants for its secured credit facility.

The outlook is stable.

Moody's said the B2 corporate family rating reflects modest scale, limited free cash flow generation and significant debt-to-EBITDA leverage of 7.9 times for the 12 months ended Sept. 30.

The rating also incorporates the highly competitive nature of the radio industry, the inherent cyclicality of the advertising market and the belief that radio is a mature industry with modest growth prospects, according to the agency.

Regent's rating is supported by the company's continued local market focus and the diversity of its revenue mix and geographic footprint, Moody' said.

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