Moody Upgrades Univision Stock Rating
January 5, 2015 at 1:54 PM (PT)
MOODY'S INVESTORS SERVICE has raised its ratings outlook on UNIVISION COMMUNICATIONS to "positive" from "stable," thanks to a bullish outlook on earnings growth and strong cash flows over the next year, BIZJOURNALS.COM reports.
The ratings agency also raised its speculative grade liquidity rating to SGL-2 reflecting improved liquidity, including greater free cash flow generation. MOODY's maintained Univision's B3 corporate family rating and probability of default rating of B3-PD.
The upgrade is certainly timely as sources told the L.A. TIMES that UNIVISION is preparing for an IPO next year -- even though some of the company's owners want a public offering of less than 50% of the company to recoup their investment. UNIVISION is owned by a consortium that includes L.A. billionaire HAIM SABAN, several private equity firms and MEXICO's GRUPO TELEVISA.
"The positive outlook reflects our expectation that, despite a modest revenue decline in 2015, EBITDA and free cash flow will continue to grow due to an increase in high margin retransmission fees, better performance for radio operations based on improved audience ratings, and benefits from cost controls," MOODY VP/Senior Credit Officer CARL SALAS said in a statement. "We believe management is focused on realizing returns from the company's growth investments over the past three years potentially to position itself for an IPO as well as to facilitate an eventual exit or reduction in ownership by its financial sponsors which have held their positions in UNIVISION since 2007."