Moody's rates Adams Outdoor loan B1, B2

Moody's Investors Service assigned a B1 rating to Adams Outdoor Advertising LP's proposed $270 million of senior secured bank credit facilities including its $50 million revolving credit facility and $220 million term loan B and a B2 to its $25 million second lien term loan B2. The company's senior implied rating was confirmed at B1. The outlook is stable.

Moody's said the ratings reflect Adams' dominant position in the markets in which it operates, very attractive EBITDA margins of close to 50% and meaningful asset value.

Offsetting the company's relatively low operating risk is the company's high leverage following the re capitalization.

The ratings also consider Adams' history of debt-financed acquisitions which have inhibited de-levering as well as the management's decision to repay junior capital with secured debt, Moody's said.

Following the transaction, adjusted debt-to-EBITDAR will be high at 8.4 times and cash flow coverage of interest expense, rent and capital expenditures will be thin.

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