Jeff Kilrea Co-President, Corporate Finance at CapitalSource Finance LLC is the latest lending expert to check in as RBR/TVBR assesses the credit markets for radio and television deals. He too says credit remains tight. Noting that Magna’s Bob Coen, the dean of ad forecasters, lowered his estimates just this week, Kilrea expects that trend of lower ad spend estimates to continue, which in turn will keep a tight rein on broadcast lending terms.
“Credit markets for all sectors have been challenged for the past six to nine months. Lack of liquidity, higher interest rates, lower leverage levels when debt is available coupled with a soft advertising environment have seriously impacted the lending and trading marketplace. M&A activity is down significantly year over year. Multiples have yet to experience much downward movement though and that is another impediment to station trading activity,” Kilrea said.
His outlook? “I expect the balance of ’08 to be soft as analysts continue to lower advertising estimates for the year. Liquidity will remain tight and leverage will continue to be conservative,” Kilrea said.
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