Moody's: Nexstar positive

Moody's Investors Service said it revised the outlook of Nexstar Finance Holdings, Inc. to positive from stable and affirmed the B3 corporate family and probability of default ratings as well as the SGL-2 speculative-grade liquidity rating and the Ba3 (LGD2, 10% from LGD1, 7%) rating on its first-lien credit facility.

Moody's affirmed Nexstar's senior secured regular bonds at B3 (LGD4, 52% from LGD3, 45%) and senior subordinated bonds at Caa2 (LGD5, 88% from LGD5, 84%) and Mission Broadcasting, Inc.'s senior secured bank credit facility at Ba3 (LGD2, 10%, from LGD1, 7%).

Nexstar proposed a $50 million increase in its first-lien term loan with proceeds to be applied to repayment of the 11 3/8% senior notes due April 2013. The company also announced plans to acquire two stations from Liberty Media Corp. for $20 million, to be funded with $2.5 million of equity and $17.5 million of borrowings under its revolving credit facility.

The outlook change incorporates expectations that the company will continue to apply the free cash flow generated from its strong performance to permanent debt reduction, the agency said.

Also, the proposed transaction would modestly lower interest expense through the replacement of higher cost debt with lower cost debt, the agency added.

Nexstar's ratings consider its high, albeit improved, leverage, which poses challenge for managing a business vulnerable to advertising spending cycle, the agency said.

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