The E.W. Scripps Co. ICR Placed On Watch Positive On Acquisition Of ION Media, Issue-Level Ratings On Watch Developing

U.S.-based television broadcaster The E.W. Scripps Co. is acquiring ION Media Networks Inc. for $2.65 billion. The company plans to issue $1.85 billion of secured and unsecured notes and $600 million of preferred stock, which it will use--along with the proceeds from asset sales--to fund the acquisition. We estimate that this will cause its pro forma 2020 leverage to remain above 6x assuming we treat the proposed preferred stock as debt. Based on the expected improvement in the combined company's scale, profitability, and cash flow generation, we are placing our 'B' issuer credit rating on Scripps on CreditWatch with positive implications. At the same time, we are placing our issue-level ratings on the company's existing secured and unsecured debt on

...September 25, 2020 - U.S.-based television broadcaster The E.W. Scripps Co. is acquiring ION Media Networks Inc. for $2.65 billion. - The company plans to issue $1.85 billion of secured and unsecured notes and $600 million of preferred stock, which it will use--along with the proceeds from asset sales--to fund the acquisition. We estimate that this will cause its pro forma 2020 leverage to remain above 6x assuming we treat the proposed preferred stock as debt. - Based on the expected improvement in the combined company's scale, profitability, and cash flow generation, we are placing our 'B' issuer credit rating on Scripps on CreditWatch with positive implications. - At the same time, we are placing our issue-level ratings on the company's existing secured and unsecured debt on CreditWatch with developing implications. This is because, depending on the resolution of our CreditWatch on the issuer credit rating and the proportion of secured and unsecured notes included in the $1.85 billion...

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