Hispanic radio/television group Entravision is bringing in a total of $405M in finance instruments, the majority of which will go to knock down existing debt and push all major maturities back several years. Moody’s says the plan is worth a new and improved corporate rating.
Coming in are a $30M revolver and a $375 million 1st lien senior secured term loan. They will help make debt packages of $324M and $20M go away and will fund about $21M in call premiums.
The end result will be improved leverage, maintenance of a corporate rating of B2 and an outlook upgrade from stable to positive.
Leverage stands at 5.6x, estimated forward to 9/30/13. That will be a bit higher than March 2013’s 5.3x, but is a vast improvement over the 6.7x the company was facing at the end of its fiscal 2011.
Moody’s credits better-than-expected political income in 2012 as well as good core advertising results for generating healthy EBITDA levels and reducing leverage.
The company’s solid standing serving the rapidly-growing Hispanic population is a strength, but Moody’s warns of new competition as mainstream broadcasters consider jumping into the market.
Moody’s notes that Entravision is seeking to get its leverage down to 5x, and further notes that the current financial moves put off any significant maturities until 2018.
Moody’s analyst Carl Salas said that the combination of Entravision’s strong revenue prospects for 2013 and its focus on leverage reduction are the basis of its outlook upgrade.