S&P cuts Salem Media notes to

S&P said it cut Salem Media Group Inc.’s 7 1/8% senior secured notes to B- from B+.

“The downgrade follows the company's plan to draw $44.7 million from its $50 million delayed-draw 2028 notes, bringing the total amount of 2028 notes to $159.4 million and reducing recovery prospects. We revised the recovery rating to 3 from 1, indicating our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default,” S&P said in a press release.

The company plans to use the proceeds from the incremental 2028 notes to repay the $36.5 million outstanding balance on its 6¾% senior secured notes due in 2024, which are subordinated to the 2028 notes.

“Our B- issuer credit rating and negative outlook on Salem are unaffected because the transaction does not materially affect the company's credit metrics,” the agency said.

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