Moody's rates Hubbard loans Ba3, Caa1

Moody's Investors Service said it assigned Hubbard Radio, LLC a B2 corporate family rating and a B2 probability-of-default rating.

A Ba3 (LGD 3, 32%) instrument rating was assigned to the company's proposed $10 million senior secured first-lien revolver and $270 million senior secured first-lien term loan B and a Caa1(LGD 5, 85%) rating was assigned to its proposed $140 million senior secured second-lien term loan C.

The outlook is stable.

The new revolver and term loans will be used as part of the financing for the $505 million acquisition of 13 radio stations from Bonneville International Corp.

The ratings reflect the cyclical nature of radio advertising demand, fragmentation of media outlets and the company's reliance on two markets, Washington D.C. and Chicago, for a combined two-thirds of total revenue, the agency said.

The ratings are supported by 40% EBITDA margins and a consistent track record for good operating performance under the current station managers, the agency said.

The debt-to-EBITDA ratio is 5.6 times.

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