Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
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
Accept our 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 information 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
07 Mar 2011
Approximately $698 million of rated debt affected
New York, March 07, 2011 -- Moody's Investors Service assigned a B1, LGD1, 0% rating
to Radio One, Inc.'s ("Radio One") proposed $25 million
first out, first lien revolver due 2015 and a B2, LGD2,
27% rating to the company's new first lien term loan due
2016. Moody's also raised the company's Probability
of Default Rating ("PDR") to Caa1 (from Caa2) and affirmed its Caa1 Corporate
Family Rating ("CFR"). The outlook remains stable.
The proposed $411 million of new credit facilities replace the
existing $385 million facilities with the increase in the term
loan commitment used to fund the $13.7 million capital call
related to TV One (as discussed in Moody's press release dated December
8, 2010) as well as to fund transaction fees, add approximately
$13 million to cash balances, and term out revolver outstandings.
The revision of the PDR to Caa1 from Caa2 results in an upgrade of the
12.5%/15.0% subordinated Notes due 2016 to
Caa2 from Caa3.
Issuer: Radio One, Inc.
The following ratings were assigned:
.New $25 million first out, first lien revolver
due 2015 -- B1, LGD1, 0%
.....New $386 million first
lien term loan due 2016 -- B2, LGD2, 27%
The following ratings were upgraded:
Probability of Default Rating -- Caa1 (from Caa2)
12.5%/15.0% senior subordinated Notes
due 2016—Caa2, LGD5, 81% (from Caa3)
The following rating was unchanged:
.... Corporate Family Rating --
Caa1
The following ratings will be withdrawn upon closing of the transactions:
.Amended & restated $38.8 million first
lien revolver due 2012 -- B1, LGD2, 12%
....Amended & restated $323.0
million first lien term loan due 2012 (tranche B) -- B1,
LGD2, 12%
.$23.7 million first lien term loan (original
amount of $300 million) due 2012 (tranche A) -- B1,
LGD2, 12%
RATING RATIONALE
The Caa1 corporate family rating reflects Radio One's high pro forma debt-to-EBITDA
leverage of approximately 8.0x (incorporating Moody's standard
adjustments) mitigated by recently improved operating performance as a
result of gains in national advertising in 4Q10. Despite anticipated
EBITDA growth and improving net debt-to-EBITDA leverage
ratios for FY2011, debt balances could increase by approximately
$27 million over the next 12 months due to the potential accretion
of the PIK portion of the 12.5%/15% subordinated
notes due 2016. Furthermore, excluding discretionary dividends
from TV One, EBITDA less capex coverage of interest expense (including
PIK portion of the sub notes) is tight at approximately 1.0x.
Incorporated in the rating is Radio One's large market presence and niche
focus targeting the African-American audience, its reliance
on four of its sixteen markets for approximately half of its revenues,
and approximately $17 million in potential funding requirements
scheduled for 1Q2012 related to the company's ownership in Reach
Media. For the 12 months ended December 31, 2010, the
company reported revenues of $280 million, in line with expectations
and 4.8% ahead of revenues for 2009. As expected,
Radio One is refinancing credit facilities in advance of the 2012 maturities
with the proposed new revolver and term loan facilities. Financial
maintenance covenants including maximum senior secured leverage,
maximum total leverage, and minimum interest coverage, are
expected to be set with an approximate 20% EBITDA cushion as well
as with additional limitations on restricted payments, investments
and additional indebtedness.
Radio One's PDR was revised to Caa1 (from Caa2) reflecting Moody's
expectation for an average family level recovery rate. As a result
of the PDR revision, the company's senior subordinated notes
due 2016 were upgraded to Caa2 (from Caa3) and the rating on the Term
Loan B, which we rank below the first out revolver, was lowered
to B2 (from B1).
The stable outlook reflects our expectation that Radio One will address
current challenges in Washington DC and Dallas markets as a result of
management turnover and increased competition, respectively,
and will improve debt-to-EBITDA ratios as the economy stabilizes,
operating performance improves, and free cash flow is applied to
reduce debt or enhance liquidity.
Ratings could be upgraded if debt-to-EBITDA leverage ratios
are sustained below 7.0x (incorporating Moody's standard adjustments)
as a result of an improving economic environment and greater advertising
demand in combination with free cash flow being applied to reduce debt
balances. Ratings could be downgraded if revenue and EBITDA are
negatively impacted by increased competition in one or more of its four
key markets or an unexpected downturn in advertising resulting in debt-to-EBITDA
leverage ratios greater than 9.50x. Increased debt levels
due to discretionary items including share repurchases or the funding
of increased ownership of current investments could also negatively impact
ratings, particularly if these actions impair liquidity.
The most recent rating action for Radio One was on December 8, 2010
when Moody's confirmed its Caa1 CFR and assigned ratings to the company's
amended and restated credit facilities due 2012 in addition to its subordinated
notes due 2016.
Recent Events
On February 25, 2011, Radio One entered into agreements to
increase its ownership in TV One, an unrestricted subsidiary,
to approximately 50.8% from 36.8%.
Purchased interests are expected to come from certain financial investors,
TV One management and Direct TV. These purchases are to be funded
largely with proceeds from a recent $119 million issuance of 10%
notes due 2016 held entirely by funds of Canyon Capital Advisors LLC,
proceeds from the new term loan, plus cash on hand. Although
Radio One may be in a position to consolidate the financial reporting
of TV One, the 10% notes due 2016 are not an obligation of
Radio One. For 2011, we expect TV One to generate more than
the approximately $107 million of revenue and approximately $22
million of EBITDA booked in 2010 as a result of its growing subscriber
base and price escalators. Double digit increases in revenues and
EBITDA for 2011 should provide more than sufficient cash flow to fund
annual debt service of approximately $12 million annually as well
as shareholder dividends. The 10% notes due 2016 carry a
debt incurrence test of 7.0x debt-to-EBITDA.
The transaction implies a valuation of approximately $534 million
for TV One.
Principal methodologies used in this rating were Global Broadcast Industry
published in June 2008, and Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Radio One Inc., headquartered in Lanham, Maryland,
is an urban oriented multi-media company that operates or owns
interests in broadcasting stations (53 stations in 16 markets),
a cable television network, and Internet-based properties,
largely targeting the African-American audience. The Chairperson
and President (Chairperson's son) hold approximately 92% of the
outstanding voting power of the common stock. The company reported
sales of approximately $280 million through the 12 months ended
December 31, 2010.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, confidential and proprietary Moody's Investors
Service information, and confidential and proprietary Moody's
Analytics information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
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.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
New York
Carl Salas
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
John Diaz
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Assigns B1 Rating to Radio One's New Revolver and Assigns B2 Rating to its New Term Loan B
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.
|
|
