Moody's reviews TV broadcasters

Moody's Investors Service said it placed on review for downgrade Gray Television, Inc. (B2 corporate family rating), FoxCo Acquisition Sub LLC, Local TV Finance, LLC, Newport Television Holdings LLC and NV Broadcasting, LLC.

The reviews are prompted by heightened concern that the television broadcasting sector will face substantial revenue and cash flow deterioration due to the high probability of further deterioration in the U.S. economy and its impact on advertising revenue, according to the agency.

Gray Television has a B2 corporate family rating, B3 probability-of-default rating and B2 ratings (LGD3, 35%) for $100 million revolving credit facility and $925 million term loan facility.

FoxCo has B2 corporate family and probability-of-default ratings, B1 ratings (LGD3, 32%) for $50 million senior secured revolving credit facility and $515 million senior secured term loan B facility and Caa1 rating (LGD 5, 86%) for the $200 million senior unsecured notes.

Local TV has B2 corporate family and probability-of-default ratings, Ba3 ratings (LGD2, 29%) for $30 million six-year senior secured revolving credit facility and $275 million six-year senior secured first-lien term loan and Caa1 rating (LGD5, 83%) on $190 million eight-year senior notes.

Newport Television Holdings has B2 corporate family and probability-of-default ratings and Caa1 rating (LGD6, 94%) for $100 million senior discount notes.

Newport Television has B2 corporate family and probability-of-default ratings, Ba3 rating (LGD3, 30%) for $590 million senior secured credit facility and Caa1 (LGD5, 81%) for $200 million senior pay-in-kind toggle notes.

NV Broadcasting has B3 corporate family and probability-of-default ratings, B1 rating (LGD3, 30%) for $20 million senior secured first-lien revolving credit facility and $195 million senior secured first-lien term loan facility, and Caa2 (LGD5, 80%) for $100 million senior secured second-lien term loan facility.

Parkin Broadcasting, LLC has B1 ratings (LGD 3, 30%) for $5 million senior secured first-lien revolving credit facility and $40 million senior secured first-lien term loan facility.

Television broadcasters derive a majority of their revenue from cyclical advertising. Annual television station revenue performance is also affected by the timing of the Olympics and elections, the agency said, which will mean lower revenue in 2009.

Moody's said it expects television broadcasting revenue to continue to come under increasing cyclical pressure due to depressed consumer confidence, the slowdown in consumer spending, its impact on corporate profits and the resulting cutbacks in advertising and marketing budgets by several industries.

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