In his quarterly conference call Wednesday (7/20), Media General CEO Marshall Morton emphasized that refinancing the company’s senior debt is his number one financial objective, even though the current credit facility runs to 2013. A few hours later Moody’s Investors Service changed its rating outlook for Media General to “negative” from “stable.”
“The outlook change reflects Moody’s concern that Media General’s capacity to reduce debt will be weakened by the cost of refinancing its credit facility that matures in March 2013. In addition, Moody’s is concerned that Media General’s already modest free cash flow generation and debt reduction capacity is vulnerable to weakness in the advertising market,” the ratings agency said.
“Moody’s expects Media General will manage its cost structure more aggressively going forward, but the company’s modest free cash flow generation and high leverage limit its financial flexibility. Media General’s B2 Corporate Family Rating (CFR) is not affected,” the statement said.
Media General has approximately $300 million of debt rated by Moody’s.
