Moody's Investors Service assigned a B2 rating to a new issue of 225 million in senior subordinated notes due 2017 by LBI Media, the parent company of Liberman Broadcasting. Moody's also affirmed LBI's B1 corporate family rating and upgraded LBI's senior secured credit facility to Ba1 from Ba2. Proceeds from the bond sale will be used to refinance the company's 10.125% senior subordinated notes due 2012, repay borrowings under its revolving credit facility and fund the 10 million bucks acquisition of KPNZ-TV Salt Lake City. "LBI's rating reflects the company's high debt to EBITDA leverage of 7.4x," said Moody's, also noting a "lack of significant geographic diversification and revenue and cash flow concentration in the Los Angeles market."
Additionally, said the ratings agency, "LBI's ratings reflect its modest scale and our expectation that the company will remain acquisitive as it seeks to expand its current station portfolio in existing and new markets." But it also noted plusses. "The company's ratings are supported by its industry leading margins, clustering of radio and television stations in the top Hispanic markets and concentration of local advertising revenues. In addition, Moody's expects LBI to benefit from the strong Hispanic demographic trends and expected above average growth rates for the Hispanic media market," Moody's stated.
Moody's has taken the following ratings actions:
LBI Media, Inc.
Corporate Family Rating — Affirmed B1
Probability of Default Rating — Affirmed B1
$150 million Secured Revolver — Upgraded to Ba1 from Ba2 (from LGD 2, 21% to LGD 2, 18%)
$110 Million Secured Term Loan — Upgraded to Ba1 from Ba2 (from LGD 2,
21% to LGD 2, 18%)
$225 Million Senior Subordinated Notes due 2017 — Assigned B2 (LGD 4, 70%)
Ratings/assessments to be withdrawn:
10.125% Senior Subordinated Notes due 2012 — B2 (LGD 4, 69%)
The outlook is stable.