Moody's cuts Sinclair Broadcast notes to B1

Moody's Investors Service said in a corrected rating that it affirmed Sinclair Broadcast Group's Ba3 corporate family rating and assigned a Baa3 rating to Sinclair Television Group Inc.'s new $225 million term loan A-1 facility. Moody's also affirmed Sinclair Television's secured revolver at Baa3, secured term loan A at Baa3 and downgraded its 8% subordinated notes to B1 from Ba3.

The outlook is stable.

The actions follow Sinclair Broadcast's announcement of plans to fund the redemption of Sinclair Television's 8¾% senior subordinated notes due 2011 with a combination of bank debt (the new $225 million term loan A-1), a draw on its $175 million revolving credit facility and cash on hand.

The ratings downgrade of the subordinated notes is based on Moody's methodology and reflects the increase in senior priority debt following the refinancing, the agency said.

The ratings reflect the company's high debt-to-EBITDA ratio of 6.2x as of September, risks associated with potential future investments outside of the broadcasting sector and increasing business risk associated with the broadcast television industry's overall decline.

The rating is supported by the company's strong EBITDA margins, diverse geographic footprint, diverse network affiliations and continued local market focus, the agency added.

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