Research Update: The E.W. Scripps Co. New Debt Issuance Rated 'BB-' On ION Media Acquisition; All Other Ratings Remain On CreditWatch

U.S.-based TV broadcaster The E.W. Scripps Co. plans to issue a $650 million senior secured term loan to help fund its $2.65 billion acquisition of ION Media Networks, which is expected to close in first-quarter 2021. The balance of the purchase price will be covered by a future $700 million senior secured debt issuance, a future $500 million unsecured debt issuance, a $600 million preferred equity investment from Berkshire Hathaway, and $336 million of cash from the company's balance sheet. We expect Scripps' pro forma leverage will remain in the low-6x area through 2021. While the acquisition benefits its scale, profitability, and cash flow generation, it does not materially improve our view of Scripps' competitive position due to its exposure

...- U.S.-based TV broadcaster The E.W. Scripps Co. plans to issue a $650 million senior secured term loan to help fund its $2.65 billion acquisition of ION Media Networks, which is expected to close in first-quarter 2021. The balance of the purchase price will be covered by a future $700 million senior secured debt issuance, a future $500 million unsecured debt issuance, a $600 million preferred equity investment from Berkshire Hathaway, and $336 million of cash from the company's balance sheet. - We expect Scripps' pro forma leverage will remain in the low-6x area through 2021. While the acquisition benefits its scale, profitability, and cash flow generation, it does not materially improve our view of Scripps' competitive position due to its exposure to cyclical advertising revenue in a growing market of ad-supported, free-to-stream products. - Our issuer credit rating on Scripps remains on CreditWatch positive, and our existing senior unsecured issue-level ratings remain on CreditWatch...

Research Update