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Moody's rates Cumulus unit following plan to emerge from bankruptcy

Moody's on May 29 assigned a B3 corporate family rating to Cumulus Media Inc. unit Cumulus Media New Holdings Inc. following the company's plan to emerge from bankruptcy.

The rating agency also assigned a B3 rating to the company's new $1.3 billion first-lien senior secured term loan due 2022. The outlook is stable.

Earlier this month, the U.S. Bankruptcy Court for the Southern District of New York confirmed Cumulus' reorganization plan.

Cumulus' B3 corporate family rating reflects the company's pro forma debt-to-EBITDA leverage of 6.1x as of the first quarter and challenging market conditions in the terrestrial radio industry.

As part of the reorganization plan, about $1.73 billion of secured term loans will be exchanged for $1.30 billion of new secured term loans and 83.5% of the equity and $610 million of unsecured notes and other unsecured claims will be exchanged for 16.5% of the equity upon exit from bankruptcy.