Dec 11 - Standard & Poor's Ratings Services said today that its ratings and
outlook on Providence, R.I.-based LIN TV Corp. are unaffected by the
company's announcement that its wholly owned subsidiary, LIN Television Corp. is
proposing to amend and extend its senior secured credit facility. This includes
the 'B' corporate credit rating on LIN, as well as the 'BB-' issue-level and '1'
recovery ratings on the term loan B. The outlook is stable.
LIN hopes to amend portions of its existing senior secured credit facilities
and reprice its existing term loan B. Amendments include extending the
revolver maturity by one year to October 2017, loosening or eliminating a
number of financial covenants, increasing the incremental facilities basket,
and adjusting the excess cash flow sweep stepdowns. Leverage, which was 6.3x
debt to last-12-months' adjusted EBITDA as of September 30, 2012, will be
unchanged pro forma for the proposed transaction. The repricing will result in
a modest improvement in EBITDA interest coverage and discretionary cash flow.
Our rating on LIN reflects our assessment of the company's business risk
profile as "fair" and its financial risk profile as "highly leveraged," based
on our criteria. We view LIN's business risk profile as fair based on its
portfolio of TV stations in midsize markets, strong position in local news,
and an EBITDA margin comparable to its peers. Factors in our assessment of
LIN's financial risk profile as highly leveraged include its high debt
leverage and large contingent liability stemming from its guarantee of $815
million joint-venture debt. LIN's fully adjusted leverage of 6.3x, as of Sept.
30, 2012, is in line with our financial risk indicative ratios of debt to
EBITDA of greater than 5x, for a highly leveraged financial risk profile. (For
the latest complete corporate credit rating rationale, see Standard & Poor's
research report on LIN Television, published Oct. 4, 2012, on RatingsDirect.)