Moody's ups Media General, rates loans Ba1, B1

Moody's Investors Service said it upgraded Media General, Inc.'s corporate family rating to B1 from Caa1 reflecting the marked improvement in credit metrics pro forma for the pending stock merger with New Young Broadcasting Holding Co., Inc.

Moody's also assigned Ba1 to the company's proposed $60 million first-lien super priority revolver and B1 to the proposed $900 million first-lien senior secured term loan.

Proceeds from the credit facilities along with balance sheet cash of $28 million will be used to repay $601 million of Media General's existing debt plus $163 million of Young Broadcasting's debt, as well as to fund $61 million of call premiums, a $50 million pension plan contribution, plus $53 million of fees and expenses.

The probability of default rating was upgraded to B2-PD from Caa1-PD reflecting the proposed all bank debt structure.

The speculative grade liquidity rating was upgraded to SGL-2 from SGL-3 and the outlook is stable. These actions conclude Moody's review for upgrade of the company's ratings initiated on June 10.

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