Moody’s looks at Univision debt offering


UnivisionHispanic multimedia giant Univision is looking to add to the amount of debt that will come due in 2022 in order to reduce other loans that come due much earlier. Analyst firm Moody’s has rated the plan.

The proposed offering, which will add $300M to a $625M senior first secured lien due in 2022 is rated B2.

According to Moody’s, about 93% of the total will be used to pay down 2014 and 2017 maturities. It reduces refinancing risk for those instruments, at the expense of about $7M in annual interest expense – bringing total interest expense for the 2022 maturities to about $20M annually.

The analyst believes Univision can handle that amount; should have no problem with the 2014 deadline and has means to deal with the 2017 deadline as well. It has also bought time to both increase earnings and reduce leverage.

Moody’s said it is not changing the company’s Corporate Family Rating of B3, which “…reflects its strong and leading market position in Spanish-language media within the U.S. and good intermediate-term growth prospects tempered by its very high leverage, vulnerability to cyclical advertising and refinancing risk associated with its debt maturities.” Moody’s added, “Growth prospects supported by Hispanic demographic trends and the market position, as well as strong operating margins lead to good unlevered cash flow generation.”