Emmis has been working tirelessly to put its financial house in order in recent years, and at least one careful observer is impressed. Wall Street ref Moody’s Investor Service says the company is under review for an upgrade of its current B3 rating.
A number of factors are playing into Moody’s rationale, including decent revenue performance during the most recent quarter, the close on the sale of KXOS and the use of funds received to repay debt; and the continued divestiture of non-core assets, including an $8.5M payday in exchange for some of the company’s magazines
And there’s more. Moody’s noted, “In September 2012, the company amended the rights of the holders of the Preferred Stock including canceling accumulated but undeclared dividends and eliminating restrictions on Emmis’ ability to pay common share dividends. Management also indicated it is looking to refinance existing debt facilities at significantly lower interest rates.”
The rating firm concluded, “Moody’s review of ratings will focus on the performance of radio and publishing operations and will also consider the company’s improving financial profile including the potential for greater free cash flow generation and continued debt reduction consistent with management’s stated goal to further reduce leverage.”