Borrowing arrangements are proceeding at CBS in connection with the planned separation of its radio business from the parent corporation.
As has been reported, the company is expected to pursue an IPO; Moody’s Investors Service wrote recently it thinks CBS Radio will begin operating as a standalone company in early 2017.
CBS now has priced its recently announced $1.46 billion in debt financing.
For those who follow such corporate financial details: CBS Radio Inc. has priced an offering of $400 million in aggregate principal amount of 7.25% senior unsecured notes due 2024; it also established pricing for a $1.06 billion senior secured term loan B facility maturing in 2023 at an interest rate of LIBOR plus 3.50%, with a LIBOR floor of 1%. The offering of the notes is expected to close on Oct. 17.
CBS Radio also is expected to enter into a $250 million senior secured revolving credit facility maturing in 2021 simultaneously with the term loan, subject to the completion of documentation and customary closing conditions. That will be available to CBS Radio for corporate purposes.
In analyzing the outlook for CBS Radio and its debt late last month, Moody’s described it as “the second largest radio broadcaster in the U.S. with leading market positions in 19 of the top 25 markets.” It estimated its revenue for the most recent 12-month period at approximately $1.2 billion. Moody’s said CBS Radio “benefits from a geographically diversified footprint with strong market clusters in most of the areas it operates which enhances its competitive position. A diversified format offering of music, news and sports are also positives to the rating.” It also noted “the secular pressure in the radio industry with an increasing number of digital music offerings and advertising alternatives as well as the cyclicality of the industry.”