Ultimately Wall Street ref Moody’s Investor Service sees no need to change the rating of Cumulus Media based on its recent offering of $80 million in Class A common stock. But it did find reason to applaud the tactic.
The reason is that most of the money is going to redeem $77.6 million worth of Series B preferred stock, which includes accrued and unpaid dividends. That makes the move credit positive.
The move will also have the positive effect of lowering the company’s level of leverage, if only slightly.
The group is said to currently have 520 radio stations of its own in 108 markets, and networks serving a total of 5,500+ affiliates.
Cumulus currently has two major deals pending; one involves the sale of numerous stations to Townquare Media; and the other is the acquisition of radio network operator WestwoodOne. The Townsquare deal was struck in large part to finance the WestwoodOne deal. Both transactions are under regulatory review, a review which is currently on hold due to the government shutdown.