Belo's senior unsecured ratings downgraded to 'Ba1' from 'Baa3'

Belo's senior unsecured ratings downgraded to 'Ba1' from 'Baa3' - Moody's

	Published : Thu, 18 Oct 2007 06:44 By : Agencies Print this Story

MUMBAI (Thomson Financial) - Moody's Investors Service said it has downgraded media firm Belo Corp's senior unsecured ratings to 'Ba1' from 'Baa3' citing the company's free cash flow-to-debt which has limited scope for improvement due to revenue pressure in the newspaper business.

The ratings agency said in its view Belo's reliance on a bank facility with a MAC clause to fund the significant 350 mln usd November 2008 note maturity is a liquidity profile consistent with a speculative-grade rating.

Moody's said it has assigned a 'SGL-2' rating to the issue reflecting Belo's reliance on its bank facility.

The ratings agency said it does not expect Belo to have sufficient internally generated cash resources to fund the November 2008 note maturity based on the existing cash balance and projected free cash flow of 75 to 100 mln usd through the maturity date.

Moody's said it believes that Belo will maintain compliance with the financial covenants in the revolver and has some flexibility with an unsecured credit facility to raise cash through asset sales.

The ratings agency also assigned a 'Ba1' corporate family rating (CFR) and 'Ba1' probability of default rating on the company.

Moody's said the long-term ratings remain on review for downgrade based on the ratings agency's ongoing evaluation of Belo's proposed spin-off of the newspaper operations and the operating and financial strategies for the residual broadcast properties upon completion of the spin-off.

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Belo's senior unsecured ratings downgraded to 'Ba1' from 'Baa3' - Moody's