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S&P applies BB- to Tribune Media notes
Standard & Poor's said it assigned its BB- issue-level rating and 3 recovery rating to Tribune Media Co.'s proposed $1 billion senior unsecured notes, which are expected to be issued in one or more series. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; upper half of the range) of principal in the event of a payment default.
The company will use the entire proceeds to prepay a portion of the roughly $3.5 billion in outstanding principal under its existing senior secured term loan due 2020.
The BB+ issue-level and 1 recovery ratings on the senior secured term loan remain unchanged. The 1 recovery rating indicates an expectation for very high recovery (90%-100%) of principal in the event of a payment default.
S&P assesses Tribune's financial risk profile as "aggressive." The debt offering will have no material impact on Tribune's adjusted leverage, and the agency estimates that adjusted debt to average-eight-quarter EBITDA (an adjustment used to smooth the differences between election and nonelection years) will be in the mid-4 times area for 2015.
S&P expects that leverage will remain between 4 times and 5 times, in line with the range that is typically associated with an "aggressive" financial risk profile, for the next two years.
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