Moody's: LBI Media notes B2

Moody's Investors Service said it assigned a B2 (LGD 3, 31%) rating to LBI Media, Inc.'s proposed senior secured note offering.

Moody's also said it affirmed the company's Caa1 corporate family rating and the Caa2 (LGD 5, 81%) rating on its $229 million of 8½% senior subordinated notes due July 2017.

The company plans to issue up to $240 million of new senior secured notes to refinance outstanding indebtedness under its existing bank credit facilities and potentially repay its $42 million of 11% senior discount notes, the agency said.

The B1 ratings on LBI's existing revolving and term loan facilities will be withdrawn upon full repayment.

The outlook is stable.

Despite the rebound in financial results in 2010, coupled with expectations for solid revenue and EBITDA growth in 2011, Moody's said the company's credit profile remains constrained by the company's high debt leverage and weak interest coverage.

The ratings reflect its high financial risk stemming from its highly levered capital structure, thin interest coverage and negative free cash flows, the agency said.

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