Moody's cuts Media General

Moody's Investors Service said it downgraded Media General, Inc.'s corporate family rating, probability of default rating and senior secured notes due 2017 to Caa1 from B3.

The outlook is stable.

Moody's said the downgrade reflects the significant increase in interest expense associated with the company's credit facility amend and extend transaction and an assumed issuance of at least $225 million of new notes, which will result in limited free cash flow generation and constrain Media General's capacity to reduce its very high leverage.

The weak free cash flow and high leverage create vulnerability to changes in the company's highly cyclical revenue and EBITDA generation, the agency said.

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