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Moody's rates Sinclair loan Ba1, cuts loans, notes
Moody's Investor Services said it assigned Ba1 (LGD 2, 24%) ratings to Sinclair Television Group, Inc.'s proposed $100 million first-lien senior secured revolver, $250 million incremental first-lien senior secured term loan A and $280 million incremental first-lien senior secured term loan B.
The proposed credit facilities are being issued to fund Sinclair's acquisition of Four Points Media LLC and Freedom Communication's television assets.
Moody's also said it downgraded ratings on the existing first-lien senior secured term loan A due 2016 and first-lien senior secured term loan B due 2016 to Ba1 (LGD 2, 24%) from Baa3 (LGD 2, 12%) given that these existing credit facilities are pari passu with the new incremental term loans.
The downgrades reflect the increase in senior secured debt balances and the relatively smaller cushion provided by second-lien and subordinated notes, the agency said.
Moody's also said it downgraded the rating on the second-lien senior secured notes due 2017 to B1 (LGD 5, 71%) from Ba3 (LGD 4, 53%).
The agency also said it affirmed Sinclair's parent, Sinclair Broadcast Group, Inc.'s Ba3 corporate family and probability of default ratings, along with its speculative-grade liquidity rating at SGL-2.
The outlook is stable.
The ratings reflect moderately high leverage of about 4.8x on a trailing eight-quarter basis through December 2012 and incorporates higher levels of production expense attributed to increasing reverse compensation paid to its major networks, Moody's said.
The ratings are supported by expectations for strong political advertising for television broadcasting companies through the end of 2012, the agency said.
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