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Moody's could cut Media General
Moody's Investors Service said it placed Media General, Inc.'s B3 corporate family rating, B3 probability of default rating and B3 senior secured bond rating on review for possible downgrade.
The review is in connection with the company's pending negotiations with its bank group on an amendment to its senior secured credit facility, the agency said.
Moody's said the review will focus on the proposed terms of the amendment and Media General's liquidity position and projected free cash flow if an amendment is completed.
Media General's credit facility matures in March 2013 and the company is at risk of violating the financial maintenance covenants in the facility. Moody's continues to believe Media General will be able to complete an amendment.
However, the amount of incremental interest expense, proposed financial maintenance covenant levels, length of any maturity extension, and potential for a required paydown as part of the amendment could meaningfully affect the company's credit profile and will be the focus of the review, the agency said.
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