Wells Fargo has already indicated it approves of Nexstar Broadcasting Group’s acquisition of Communications Corporation of America. Now the motion has been seconded by the analysts at Moody’s Investors Service. Also, Nexstar announced an upcoming dividend payment.
Moody’s said that the deal will leave two things intact: Nexstar’s B2 Corporate Family Rating and its positive outlook.
The deal will impose a slight increase on the company’s debt profile, taking a 5.3x leverage level to 5.5x. Further, it will delay Nexstar’s efforts to lower the leverage number.
However, Moody’s believes tat 4.75x is an achievable target, and said it could trigger an upgraded rating by the end of 2014.
Commenting on the deal’s impact, Moody’s said, “The acquisition expands the company’s scale, with the addition of nineteen television stations and seven associated digital sub-channels in ten markets, seven of which are new markets. Furthermore, Moody’s expects cost and revenue synergies to contribute to EBITDA growth. The transaction creates two new duopolies and adds five duopolies, supporting continued strong EBITDA margins.”
As for the dividend, it will be a quarterly payment of 12 cents per share of Class A and B common stock. Payout date is 5/31/13, and you have until 5/17/13 to get some shares and qualify for the dividend.
