Lamar raises $400 million from bond offering


Lamar Advertising Company announced that its Lamar Media Corp. has sold $400 million of new senior subordinated notes. The proceeds will be used to buy back notes coming due sooner.

The offering by the outdoor advertising company was priced with a coupon of 7 7/8%. The new notes are due in 2018. The cash raised will fund a pending tender for Lamar’s 7 ¼ senior subordinated notes due 2013. So, the interest rate is slightly higher, but the maturity is pushed out five more years.

Lamar also entered into new senior credit facilities consisting of a $250 million revolver, $300 million Term Loan A and $575 million Term Loan B. Moody’s Investors Service noted that proceeds from the term loans, along with cash on hand and $150 million borrowed under the new revolver, will be used to repay the company’s existing Ba1 rated term loans of approximately $1.1 billion.

Moody’s assigned a Baa3 rating to the new senior secured credit facility and a B1 rating to the new $400 million senior subordinated notes. Moody’s also upgraded Lamar Media’s existing senior subordinated note ratings to B1 from B2.

RBR-TVBR observation: Lamar is not in broadcasting, but many of the Wall Street analysts who cover the company also cover broadcasting. Its two main competitors are owned by broadcasting companies: Clear Channel Outdoor and CBS Outdoor. What is important here is that yet another advertising-supported media company has successfully tapped the Wall Street bond market. The window remains open.