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

KTC cuts interest and usage fee loads in half to welcome new KTC PROUD members.

Ms. Phichamon Jitpentham, Vice President - Personal Loans, "KTC" or Krungthai Card Public Company Limited, states, "This year, KTC prioritizes the expansion of its "KTC PROUD" Revolving Loan card member base to new target groups with financial needs, and...

Crude Oil Tanker Operator Navios Midstream #B# Rating Outlook Stable

FRANKFURT (S&P Global Ratings) May 25, 2018--S&P Global Ratings said today that it had affirmed its 'B' long-term issuer credit rating on Marshall Islands-registered owner and operator of crude oil tankers Navios Maritime Midstream Partners L.P....

Shipping And Logistics Company Navios Maritime Holdings Upgraded To #B# On Improving Financial Outlook Stable

FRANKFURT (S&P Global Ratings) May 25, 2018--S&P Global Ratings said today that it had raised its long-term issuer credit rating on Marshall Islands-registered shipping and logistics company Navios Maritime Holdings Inc. (Navios Holdings) to 'B'...

Ratings Assigned To Auto ABS Transaction Driver UK Master, Compartment 3 Series 2016-1

LONDON (S&P Global Ratings) May 25, 2018--S&P Global Ratings today assigned its credit ratings to Driver UK Master S.A., Compartment 3's series 2016-1 class A and B notes. At closing, the issuer issued an unrated subordinated loan (see list...

Credit Suisse (Schweiz) AG Assigned #A/A-1# Outlook Stable

FRANKFURT (S&P Global Ratings) May 25, 2018--S&P Global Ratings said today that it has assigned its 'A/A-1' long- and short-term issuer credit ratings to Switzerland-based Credit Suisse (Schweiz) AG (CSSAG). The outlook is stable. CSSAG is the...

Related Topics