Sinclair Maneuvers toward Better Leverage

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SBG / Sinclair Broadcast GroupThe latest debt moves by Sinclair Broadcast Group are not expected to have an immediate impact on its operations or overall stability. On the plus side, the company is poised to chip away at its leverage level.


The assessment comes from Moody’s Investors Service analyst Carl Salas.

The basic move made by SBG was to add a $350M term loan to an existing $400M facility. In turn, it is retiring $338M in revolver commitments which expire in 2018.

The company has a Corporate Family Rating of Ba3, and while that will not change, Salas expects the move to improve the company’s standing within the Ba3 framework.

It is currently sitting on leverage of 5.3x. Salas expects it to get it below 5.0x by the end of the year, assuming it doesn’t seek financing for new acquisitions.

Salas suggested the company could be below 5.0x right now had it not directed some of its money toward acquisitions and stock repurchasing during the course of 2014.

The company’s rating takes into account both the general volatility of the broadcasting business and the company’s improved financial metrics and ability to generate free cash flow.