Lamar Media Corp. Upgraded To #BB# From #BB-#; New Debt Assigned #BBB-# Outlook Stable

Stocks and Financial Services Press Releases Tuesday February 13, 2018 09:10
CHICAGO--13 Feb--S&P Global Ratings
CHICAGO (S&P Global Ratings) Feb. 12, 2018--S&P Global Ratings today raised its corporate credit rating on Baton Rouge, LA-based Lamar Media Corp. to 'BB' from 'BB-'. The rating outlook is stable.

At the same time, we assigned our 'BBB-' issue-level rating and '1' recovery rating to the company's proposed $400 million term loan B. The '1' recovery rating indicates our expectation for very high recovery of principal (70%-90%; rounded estimate: 95%) in the event of a payment default.

We are also raising our issue-level ratings on the company's existing senior unsecured notes to 'BB' from 'BB-'. The recovery rating remains a '3'.

In addition, we are affirming our 'BB-' issue-level rating on the company's existing senior subordinated notes and revising our recovery rating to '5' from '3'. The '5' recovery rating indicates our expectation for modest recovery of principal (10%-30%; rounded estimate: 20%) in the event of a payment default.

The upgrade reflects Lamar's record of maintaining leverage in the low-4x area and our view that the company has more financial flexibility than its more highly levered REIT peers by operating at this leverage level. We expect leverage will remain in the low-4x area in 2018 as Lamar uses its revolving credit facility to fund tuck-in acquisitions. We also expect Lamar will continue to pay out at least 90% of its taxable income in the form of dividends because of its REIT status. In addition, with the company's large revolving credit facility and additional availability after debt repayment from the proposed transaction, we believe Lamar has strengthened its liquidity position.

The stable outlook reflects our expectation that the company will continue to generate modest organic revenue and EBITDA growth over the next 12 months while maintaining lease-adjusted leverage in the low-4x area.

We could lower the rating if the company's operating performance deteriorates because of economic pressure, and we believe its lease-adjusted leverage would rise and remain above 4.5x on a sustained basis. A downgrade would more likely occur if a permanent shift in Lamar's financial policy causes its leverage to rise above 4.5x and we believe the company's REIT status limits its financial flexibility.

Although unlikely over the next 12 months, we could raise our corporate credit rating on Lamar if the company adopts a more conservative financial policy, despite its REIT status, while maintaining fully adjusted leverage in the low-3x area. An upgrade would also require continued revenue growth in the static and digital billboard segments due to improved advertising yields, which we view as sustainable over the next two to three years.


Latest Press Release

Fitch Affirms BAM at #AA-(tha)#; Outlook Negative

Fitch Ratings (Thailand) has affirmed Bangkok Commercial Asset Management Public Company Limited's (BAM) National Long-Term Rating at 'AA-(tha)' with a Negative Outlook. A full list of rating action is at the end of this commentary. KEY RATING...

Fitch Affirms AEON Thana Sinsap at #A-(tha)#; Outlook Stable

Fitch Ratings (Thailand) has affirmed the National Long-Term Rating of AEON Thana Sinsap (Thailand) Public Company Limited (AEONTS) at 'A-(tha)' with a Stable Outlook. A full list of rating actions is at the end of this rating action commentary. KEY...

Photo Release: Make parcel delivery payments to Alpha FAST with QR Code via K PLUS and get special discount!!!

Recently, at KBank Head Office, Mr. Vallop Vongjitvuttikrai (second from right), KBank Executive Vice President, and Mr. Leong Choong Cheng, Chief Operation Officer of Alpha Performance Group, a parcel delivery service provider under the "Alpha FAST"...

กรุงศรี ออโต้ คว้า 2 รางวัลจากงาน Asian Banking and Finance Awards 2018 ตอกย้ำภาพลักษณ์นวัตกรรมสินเชื่อยานยนต์ไทย

"กรุงศรี ออโต้" ผู้นำธุรกิจสินเชื่อยานยนต์ครบวงจร เครือธนาคารกรุงศรีอยุธยา จำกัด (มหาชน) คว้า 2 รางวัล จากงาน Asian Banking and Finance Awards 2018 ในสาขา Open Banking Initiative of the Year และ Automobile Lending Initiative of the Year...

TCP Group integrates sustainability into 5-year business plan

TCP Group, the Thai beverage and snacks group that owns, manufactures, and distributes Krating Daeng (Red Bull), Ready, Sponsor, Som Plus, Mansome, and Puriku beverages as well as Sun Snack snacks, today, announced that it has embedded far-reaching...

Related Topics