The analysts at Moody’s Investors Service like the financial results from Sinclair Broadcast Group and its balance sheet refinancing plans. Sinclair’s debt ratings have gotten an upgrade.
“Moody’s Investors Service upgraded its ratings for Sinclair Broadcast Group, Inc. (“Sinclair” or the company), including the company’s Corporate Family Rating (CFR) and Probability of Default Rating (PDR), both to B1 from B2, and the ratings for the company’s individual debt instruments, as outlined below. Moody’s also assigned a Ba1 (LGD2, 10%) rating to the proposed new term loan being arranged for subsidiary Sinclair Television Group, Inc. (“STG”), which plans to term out STG’s existing term loan B (and the rating for which will be withdrawn upon execution of the proposed transaction). The Speculative Grade Liquidity (SGL) Rating remains unchanged at SGL-2, indicating our expectation that the company will maintain a ‘good’ liquidity profile over the next 12-to-15 months,” the ratings agency announced.

“The upgrades reflect Sinclair’s outperformance relative to former expectations, in conjunction with Moody’s favorable revenue outlook through the end of 2010 and improving 31%-33% EBITDA margins generated by the company’s sizable and diverse television station group. As of
June 30, 2010, debt-to-EBITDA improved to 6.0x incorporating Moody’s standard adjustments (5.7x on a net debt-to EBITDA basis), with 6%-9% free cash flow-to-debt ratios. The more moderate level of financial leverage provides some cushion to the company’s dependence on cyclical advertising spending,” Moody’s said.

Moody’s also placed Sinclair’s and STG’s ratings (other than the SGL) under review for possible further upgrade. As noted by company management, Sinclair is looking to address its debt coming due in 2012. Success on that front could lead to a further upgrade.

Here are the upgrades that Moody’s announced on Thursday:

..Issuer: Sinclair Broadcast Group, Inc.

….Corporate Family Rating, Upgraded to B1 from B2

….Probability of Default Rating, Upgraded to B1 from B2

….4.875% Senior Subordinated Notes, Upgraded to B3, LGD6, 94% from Caa1, LGD6, 94%

..Issuer: Sinclair Television Group, Inc.

….Senior Secured Revolver (Maturing June 2011), Upgraded to Ba1, LGD2, 10% from Ba2, LGD2, 11%

….Senior Secured Revolver (Maturing December 2013), Upgraded to Ba1, LGD2, 10% from Ba2, LGD2, 11%

….Senior Secured Term Loan B (Maturing October 2015), Upgraded to Ba1, LGD2, 10% from Ba2, LGD2, 11%

….Senior Secured Second Lien Notes, Upgraded to B1, LGD3, 48% from B2, LGD3, 49%

….8% Senior Subordinated Notes (Maturing March 2012), Upgraded to B3, LGD5, 84% from Caa1, LGD5, 85%


..Issuer: Sinclair Television Group, Inc.

….New Senior Secured Term Loan B (Maturing October 2015), Assigned Ba1, LGD2, 10%


Issuer: Sinclair Broadcast Group, Inc.

…Speculative Grade Liquidity Rating, SGL-2