S&P rates Lamar notes BB-

S&P said it assigned its BB- issue-level and 3 recovery ratings to Lamar Media Corp.’s planned $550 million of senior unsecured notes. The 3 recovery rating indicates expectations for meaningful (50%-70%; rounded estimate: 55%) recovery for lenders in default.

The BB- rating is in line with S&P’s ratings for Lamar’s other senior unsecured notes.

“The transaction does not affect our BB- issuer credit rating or stable outlook on Lamar because it is leverage-neutral. We expect adjusted debt to EBITDA to rise to the high-4x area in 2020 from 4.2x at year-end 2019 as a result of the coronavirus pandemic and resulting economic downturn, then improve toward the mid-4x area in 2021 as advertising continues to recover in Lamar’s markets,” S&P said in a press release.

Lamar plans to use the proceeds with cash on hand, its revolving credit facility and accounts receivable securitization facility to redeem its $650 million senior unsecured notes due in 2026.

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