S&P upgrades Meredith

S&P said it revised the outlook on Meredith Corp. to positive from stable and affirmed all of its ratings, including its B+ issuer credit rating.

The agency also said it raised the rating on the company's senior unsecured debt to B+ from B and revised the recovery rating to 4 from 5.

The upgrade reflects the improved recovery prospects following the company's voluntary repayment of nearly $700 million in secured and unsecured debt since January 2018, S&P said.

The positive outlook reflects an expectation that additional cost savings and debt reduction, funded in part by asset sales, would allow Meredith to lower leverage to lower 4x over the next 12 months, the agency said.

The debt reduction efforts exceeded prior expectations and the outlook revision reflects a belief that the company is well positioned to repay nearly $1 billion of debt in its fiscal year 2019, S&P said.

The ratings also consider the company's high leverage, high exposure to the mature and declining consumer magazine industry and the significant exposure to cyclical advertising revenues, the agency said.

These risks are partially offset by the stable cash flow generation of Meredith's local media TV broadcasting segment, which benefits from growing retransmission revenues, market duopolies and strong EBITDA margins, S&P said.

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