Moody’s Investors Service notes that there will be a positive effect of a Cumulus plan to offer a new stock series with the intention of retiring an old one, but not enough of one to warrant a rating change.
The new issue is Series of preferred stock with an initial 12% coupon, valued at $77.2M. Proceeds from the issue will be used to retire a Series A preferred stock issue that beyond carrying a 14% coupon, is set to increase to 17% come September.
According to Moody’s analyst Carl Salas, Cumulus is expected to realize $3.8M in annual savings thanks to the maneuvering. However, the company’s B2 corporate rating will remain intact and its outlook remains stable.