CBS Radio Confirms Debt Offering As IPO Nears

By on Sep, 28 2016 with Comments 0

CBS Radio

CBS Corp. has formally announced that it is preparing to take on nearly $1.5 billion in debt ahead of CBS Radio‘s initial public offering.

Reuters reported of the arrangement late Friday (Sept. 23).

In an SEC filing made public Sept. 28, CBS Radio said it plans to offer $460 million of senior unsecured notes and to enter into a $1 billion senior secured term loan.

Each are subject to market conditions, and other conditions.

CBS expects that most of the net proceeds will be used to pay CBS Inc. in cash. Funds not used to pay CBS will be applied to general corporate purposes and ongoing cash needs at CBS Radio.

CBS in early July registered an IPO for CBS Radio in early July.

The underwriters were not named at the time of the IPO registration. However, it is now known that Goldman Sachs Group, Wells Fargo & Co., Bank of America Corp. and Credit Suisse Group AG are underwriters on the IPO, while JPMorgan Chase & Co. is leading the bank financing and Deutsche Bank AG is running the bond financing, Reuters reported Friday, citing its unnamed sources.

Meanwhile, Reuters has the scoop on something potential bigger for CBS Inc. than a debt offering. Sources tell the news organization that the controlling shareholder for CBS Inc. and Viacom — the Sumner Redstone-led National Amusements Inc., will ask the two companies to consider a merger.

National Amusements possesses close to 80% of the voting shares of both CBS Inc. and Viacom.

A ‘STABLE’ OUTLOOK FOR CBS RADIO

In response to the debt offering, Moody’s Investors Service assigned CBS Radio Inc. a “B1” corporate family rating (CFR) and assigned a “Ba3” rating to the proposed $1.25 billion first lien credit facility consisting of a $250 million five year revolver and a $1 billion seven year term loan B.

The proposed $460 million senior notes are rated “B3,” while the outlook for CBS Radio is “stable.”

Amid the new talk of a Viacom-CBS Inc. merger, Moody’s expects the company to pursue an IPO and begin operating as a standalone company in early 2017.

About The Author: Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.

Comments are closed.