Moody's rates Townsquare notes B3

Moody's Investors Service said it assigned a B3 (LGD4, 66%) rating to the tack-on $145 million 9% senior notes due 2019 issued by Townsquare Radio, LLC and Townsquare Radio, Inc. and affirmed the company's B2 corporate family rating, its B2-PD probability of default rating and the B3 (LGD4, 66%, changed from 58%) rating assigned to its existing 9% notes. The outlook is stable.

The note proceeds will be used to partially fund the $229 million acquisition of 50 radio stations from Cumulus Media and the $52 million acquisition of 11 radio stations from Peak II Holding.

The B2 corporate family rating reflects the company's high pro forma debt-to-EBITDA ratio of 6.3 times, the agency said, adding that leverage has remained elevated since the July 2012 funding of debt facilities due to acquisitions, underperformance of stations acquired from Cumulus Media in 2012 and prior economic weakness in New Jersey markets, a key region for Townsquare.

Moody's said the ratings also incorporate risks associated with assimilating pending acquisitions, the potential for reduced liquidity to the extent restricted payments are funded and the mature and cyclical nature of radio advertising demand.

The ratings are supported by the company's leading revenue share and audience ratings, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.