S&P Rts Jacor Communications' $150M Sr Sub Nts B,Bank Ln BB-.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/11/97 -- Standard & Poor's today has assigned its single-'B' rating to Jacor Communications Co.'s $150 million 8 3/4% senior subordinated notes due 2007, guaranteed by Jacor Communications Inc.Additionally, Standard & Poor's has assigned its double-'B'-minus bank loan rating to Jacor Communication Co.'s $750 million bank facility. Parent company, Jacor Communications Inc.'s double-'B'-minus corporate credit rating has been affirmed. Jacor Communications' ratings reflect the company's growing operating strength in the radio broadcast industry, as the company has aggressively purchased new stations throughout 1996 and 1997. Upon the closing of pending acquisitions, the company will be the third largest radio group in terms of revenue and will own or operate 153 radio stations in 32 markets, as well as a single television station. A portion of the proceeds from the debt issue will be used to repay some of the existing bank debt, although Standard & Poor's expects the company to continue using its bank line to fund station acquisitions. Another source of flexibility is the ability to trade stations or make market swaps, such as the recent trade of four Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo. stations for six Dayton, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. stations with American Radio Systems. While acquisitions have improved the company's operating position significantly, Standard & Poor's does not expect meaningful improvement in the Jacor Communications' financial position as long as acquisitions remain a priority. Standard & Poor's expects operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. to total interest expense to remain between 2.0 times (x) and 2.5x over the next few years. Total debt, including the LYONs, to cash flow also is expected to improve, but remain above 5.0x for the same period. In addition, many newly acquired stations have limited cash flow, which lowers the company's overall operating cash flow margins to only around 29%. The bank loan rating is at the same level as the corporate credit rating. While the bank loan is secured by assets with strong resale values there is still a small possibility of somewhat less than full recovery during a severe and prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. downside Downside The dollar amount by which the market or a stock has the potential to fall. Notes: You might hear someone say that the downside on stock XYZ is $10. What that means is that the stock could fall by this amount if things got bad. scenario. Standard & Poor's expects the company to continue aggressively using bank debt for acquisitions and there is the potential for an increase in the size of the facility. While there is sufficient bank debt availability for the company to make sizeable purchases, large debt-financed acquisitions have led to lower ratings for other broadcasters dependent on debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay . OUTLOOK: Stable. Standard & Poor's expects that the company will be able to increase cash flow through a combination of reduced operating costs operating costs npl → gastos mpl operacionales and the turnaround of underperforming stations. However, the rating also includes expectations that industry consolidation may provide opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. acquisitions, which may lead to the need for additional capital. -- CreditWire CONTACT: Scott Dinsdale, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-8933 |
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