Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S ASSIGNS B3 RATING TO PRIMEDIA's PROPOSED $300M SENIOR SECURED NOTE OFFERING AND A SGL-2 SPECULATIVE GRADE LIQUIDITY RATING TO THE COMPANY

06 May 2003
MOODY'S ASSIGNS B3 RATING TO PRIMEDIA's PROPOSED $300M SENIOR SECURED NOTE OFFERING AND A SGL-2 SPECULATIVE GRADE LIQUIDITY RATING TO THE COMPANY

Approximately $2 Billion of Debt and Preferred Securities Affected

New York, May 06, 2003 -- Moody's Investors Service assigned a B3 rating to PRIMEDIA Inc.'s proposed $300 million issuance of senior secured notes due 2013, and a SGL-2 speculative grade liquidity rating to the company. Additionally, Moody's also confirmed all existing ratings for the company, as outlined below. The rating outlook remains negative.

- $300 million of to-be-issued senior notes due 2013 - B3

- $470 million of 8.875% senior notes due 2011 - B3

- $225 million of 7.625% senior notes due 2008 - B3

- $291 million of 8.5% senior notes due 2006 - B3

- $84 million of 10.25% senior notes due 2004 - B3

- $100 million of 9.2% exchangeable preferred stock - Ca

- $175 million of 10% exchangeable preferred stock - Ca

- $210 million of 8.625% exchangeable preferred stock - Ca

- Senior Implied rating - B3

- Senior Unsecured Issuer Rating - Caa2

- Speculative Grade Liquidity Rating - SGL-2 (see separate press release of today)

- Rating Outlook - Negative

The ratings reflect PRIMEDIA's high financial leverage, poor growth prospects in its consumer and business-to-business (B2B) segments, insufficient cash flow coverage of interest and dividends, very limited structural differentiation between classes of senior debt,poor business line visibility for creditors, and relatively poor asset protection metrics, especially as afforded to preferred stockholders.

However, ratings are supported by recent improvements in operating cash flow, enhanced financial flexibility and liquidity following both completed and pending divestiture of certain assets, the value ascribed to PRIMEDIA's remaining stable of consumer and B2B holdings, and management's demonstrated track record of monetizing individual asset holdings as necessary, in relatively short order and at attractive prices.

At the end of December 2002, PRIMEDIA recorded leverage (total debt plus preferred stock to consolidated EBITDA) of a very high 13.75 times. Since mid 2001, and following the sale of Seventeen magazine, PRIMEDIA will have sold assets valued at approximately $530 million, representing an average multiple of 17 times "Segment" EBITDA. Moody's notes that PRIMEDIA's definition of "Segment" EBITDA excludes a number of charges and provisions, and cannot be readily verified, given the lack of financial disclosure at the individual operating company level. Although management has indicated "zero imperative to sell assets", Moody's believes that many of PRIMEDIA's marquee names have now been sold and we question the ability of PRIMEDIA's remaining assets to command sales multiples sufficient to assure full recovery of all debt-holder and preferred shareholder obligations.

Although PRIMEDIA recorded modestly positive free cash flow results during 2002, its retained cash flow (defined as free cash flow after dividends) is likely to remain negative over the intermediate term.

PRIMEDIA continues to experience a soft sales environment, as advertising revenues, particularly B2B advertising, suffers from a prolonged economic downturn. 1Q03 revenues declined 9% sequentially and 9% year-over-year. However, largely as a result of cost cutting measures, the company has experienced substantial EBITDA growth during the past year.

The ratings incorporate PRIMEDIA's leadership position in the enthusiast magazine, business-to-business magazine, and consumer guide sectors, all of which provide for a high degree of targeted "endemic" advertising and subscriber loyalty.

At the end of March 2003, PRIMEDIA recorded liquidity of $180 million, comprising $20 million of cash equivalents and $160 million in undrawn availability under its $944 million bank credit facility. The disposition of Seventeen magazine for $182 million will result in an improvement in liquidity following the sale, which is expected to close in 2Q03. Combined, these sources of cash should be more than adequate to fund the company's retained cash flow deficit over the coming year, as reflected in the SGL-2 liquidity rating assignment. Covenants under the bank credit facility are governed by the performance of PRIMEDIA's restricted group, rather than by the results of the company's consolidated operations. Covenant compliance analysis is hampered by the substantial levels of inter-company sales, cross promotion, leasing and licensing transactions between restricted and unrestricted subsidiaries. Nevertheless a tightening of the total debt leverage covenant test to 5.75 times in 3Q03, and again to 5.5 times in 1Q04, may result in some covenant pressure.

Like the company's existing and similarly rated senior "unsecured" notes, which are now "unsecured" in name only and actually benefit from the same security package afforded to the debt borrowed under the company's unrated bank credit facilities, the to-be-issued senior secured notes benefit from an upstream guarantee from the restricted group of operating subsidiaries and are secured by a pledge of the stock of PRIMEDIA Companies Inc., an intermediate holding company that owns the stock of the operating subsidiaries. The stock and assets of the operating subsidiaries remain unencumbered.

Proceeds from the sale of the proposed notes will be used to redeem PRIMEDIA's 8.5% Senior Notes due 2006.

In Moody's opinion, PRIMEDIA's remaining assets provide bank lenders and bondholders with adequate asset coverage; however, preferred stockholder interests, in particular, may be compromised in a distress scenario. Accordingly, the preferred stock is rated four notches below the senior implied rating, solidifying the equity-like risks associated with same.

Ratings could be lifted if the company can demonstrate the ability to produce consistently positive retained cash flow. Current financial visibility is poor and Moody's does not have a high degree of confidence in its valuation model. Accordingly, ratings could be lowered if our future assessment of asset values showed impairment. Ratings could also be lowered if proceeds from future asset sales were to be used for purposes other than the permanent reduction of debt and preferred stock.

The negative outlook reflects our lack of comfort with the level of disclosure which continues to be provided by PRIMEDIA, particularly as it relates to the very sizeable level of inter-company transactions, which represent a substantial amount of restricted subsidiary group revenues and EBITDA.

New York City-based PRIMEDIA Inc. is a media company providing targeted content for both the consumer and business-to-business sectors. The company is a specialty magazine publisher and a producer and distributor of specialty video products. In addition, the company provides news and information on the Internet through ABOUT.com.

New York
Russell Solomon
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
John Page
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​
Moodys.com