Moody's downgrades Salem Media

Moody's Investors Service said it downgraded Salem Media Group, Inc.'s corporate family rating to Caa3 from Caa1, the probability of default rating to Caa3-PD from Caa1-PD, and the senior secured notes to Caa3 from Caa1. The SGL-4 speculative grade liquidity rating remains unchanged.

“The downgrade of the CFR to Caa3 reflects Salem's weak operating performance pressured by subdued radio advertising demand, high financial leverage, a deteriorating liquidity profile and the uncertainty around the company's ability to refinance its $25 million ABL revolving facility before its expiration in March 2024.

“Given the persistent macroeconomic weakness and weak advertising demand, it will be difficult for Salem to improve earnings and free cash flow generation to a level sufficient to repay the outstanding balance of $22.6 million on the ABL facility. The weak credit metrics create an elevated risk of a balance sheet restructuring including a distressed exchange,” Moody’s said in a press release.

The outlook remains negative.

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