Moody's Assigns B2 Rating To Beasley, Says Outlook Is Stable
September 13, 2016 at 4:25 AM (PT)
MOODY'S INVESTORS SERVICE has assigned a B2 corporate family rating to BEASLEY MEZZANINE HOLDINGS, LLC and a B3-PD Probability of Default Rating. MOODY's also assigned a B1 rating to the $20 million Senior Secured Revolving Credit facility and to the $265 million Senior Secured Term Loan. MOODY'S noted, "The proceeds from the transaction, together with balance sheet cash and an issuance of common stock by BEASLEY totaling approximately $300 million will be used towards the purchase of GREATER MEDIA, INC.'s radio broadcasting assets, refinance debt at both entities and pay transaction fees and expenses." MOODY's also assigned a SGL-2 Speculative Liquidity Rating, saying the outlook is stable.
The move follows BEASLEY's release of a "Lender Presentation," last week (NET NEWS 9/8), where BEASLEY BROADCAST GROUP charted the future of the company, now the 9th largest U.S. radio group by revenue, after acquiring GREATER MEDIA. The company detailed the agreement in cash and stock with GREATER MEDIA, explained how the transaction "is a strategically and financially transformative event for BEASLEY," required asset divenitures in CHARLOTTE, and how repayment of both companies' existing debt and cash consideration will be financed "with a new $285 million Senior Secured Credit Facility."
In its ratings release, MOODY'S explained, "The B2 corporate family rating reflects BEASLEY's high leverage, the mature and cyclical nature of radio advertising demand, the small size of the company, the risks associated with the relatively large pending acquisition and the strong position that the combined company will have in some of the better radio markets along the U.S. Eastern seaboard, partially offset by some concentration in three key DMAs. GREATER MEDIA is targeting execution of $7.9 million in cost savings prior to closing of the transaction, of which 75% has been implemented to date. Additional expense reductions are also targeted post-closing and are expected to be relatively easy to execute."