Moody's may up Cumulus Media

Moody's Investors Service said it placed the ratings of Cumulus Media, Inc. on review for a possible upgrade following the announced terms of its proposed acquisition of Citadel Broadcasting Corp.

The ratings on upgrade review include its probability of default rating of Caa2, corporate family rating of Caa1 and senior secured bank credit facility rating of Caa1 (LGD 3, 34%).

Moody's said it believes the potential for lower leverage, synergies and favorable diversification from the proposed acquisition improves the financial profile of the company.

The acquisition terms include a $500 million equity infusion.

Cumulus plans to acquire Citadel's 225 radio stations in more than 50 markets and also the Citadel Media business, which is among the largest radio networks in the United States, Moody's said.

After giving effect to the proposed acquisition, Cumulus would operate about 570 radio stations, the agency said, and would be well-diversified given the combination of Cumulus, CMP Susquehanna and Citadel stations across 120 markets nationally.

The $1.8 billion purchase price will be financed by a combination of $500 million in equity financing from Crestview Partners and Macquarie Capital, Moody's said, and the assumption of about $770 million in outstanding Citadel debt, which is expected to be repaid.

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