Moody’s prunes Hubbard Radio

Moody's Investors Service said it downgraded Hubbard Radio, LLC's corporate family rating to Caa1 from B3, the probability of default rating to Caa2-PD from Caa1-PD, and the backed senior secured first-lien term loan to Caa1 from B3. Moody's also downgraded the speculative grade liquidity rating to SGL-4 from SGL-3 and changed the outlook to negative from stable.

“The downgrade of the CFR to Caa1 reflects Hubbard's weak liquidity and refinancing risks related to the senior secured term loan maturing in March 2025. Given the company's weak operating performance amid weak radio advertising demand and secular pressures on the industry, Moody's views the company's ability to refinance in a timely manner as uncertain,” the agency said in a press release.

For the last 12 months ending Sept. 30, Hubbard’s debt to EBITDA (excluding Moody's standard lease adjustments) increased to 6.7x and Moody’s said it expects to widen to 6.9x before falling to the mid-5x area in 2024 as political advertising starts to pick up.

“The negative outlook reflects the elevated risks that Hubbard faces in refinancing its senior secured term loan maturing in March 2025, the need for another equity cure in Q4 2023 and the negative pressure on operating performance in the near term due to recessionary pressures on radio advertising demand,” Moody’s said.

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