S&P rates Sinclair notes B+, loan BB+

Standard & Poor’s said it affirmed the BB- corporate credit rating on Sinclair Broadcast Group Inc.

The agency also said it also assigned a B+ rating to Sinclair Television Group Inc.’s proposed senior unsecured notes due 2024 with a recovery ratings of 5, indicating 10% to 30% expected default recovery.

S&P also said it assigned a BB+ rating to the company’s proposed incremental term loan B with a recovery rating of 1, indicating 90% to 100% expected default recovery.

Finally, the agency said it revised the recovery rating on Sinclair’s senior unsecured debt to 5 from 6 and subsequently raised the rating on the debt to B+ from B.

The agency also said it raised the ratings on the company’s senior unsecured debt because it originally expected Sinclair to fund its acquisition of Allbritton Communication Co.’s television stations using only bank debt.

The outlook is stable.

The company had planned to raise $1.25 billion in incremental bank debt in October 2013, S&P said, but downsized the offering when the closing of the Allbritton transaction was delayed.

The company is now proposing to split that financing between bank debt and senior unsecured notes. As a result of this change, recovery prospects for the senior unsecured notes have increased, the agency said.

The ratings reflect the company’s satisfactory business risk profile because of its significant size, scale and diversity, along with its good EBITDA margin and a growing revenue stream from highly predictable retransmission fees from cable and satellite video service operators, S&P said.

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