The rating on Nexstar Broadcasting Group Inc. reflects its high leverage from aggressive debt-financed acquisitions, relatively weak EBITDA margin and conversion of EBITDA into discretionary cash flow compared with peers, advertising's vulnerability to economic downturns, and TV broadcasting's mature revenue growth prospects. These factors are partially offset by Nexstar's cash flow diversity from major-network-affiliated TV stations in midsize markets, broadcasting's good margin and discretionary cash flow potential, and station asset values. Slower-than-expected growth in core ad revenues in 2005, debt-financed acquisitions, and the company's failure to close an asset sale in early 2004 and use proceeds for debt reduction have resulted in persisting high leverage. Total debt to EBITDA was high, at around 9.7x at March 31, 2006. Total leverage
