Moody's affirmed its Ba2 corporate family rating on Lamar Advertising Co., with a stable outlook.
The rating agency also assigned a Baa3 rating to the proposed senior secured credit facility of Lamar Media Corp., a unit of the advertising real estate investment trust, while affirming the Ba2 rating on the existing senior unsecured notes and the Ba3 rating on the senior subordinated notes.
Moody's expects Lamar to adopt a relatively moderate financial policy and to work to sustain existing leverage levels. The REIT will likely be more sensitive to changes in advertising demand, as it converts static billboards to digital, Moody's said.
The rating agency attributed the stable outlook to its expectations that Lamar will generate organic revenue and that EBITDA growth will range from low- to mid-single-digit percentage over the next 12 months. Moody's also expects the company to direct operating cash flow to dividends, capital expenditures, or additional acquisitions.
Despite a potentially modest decline from current levels, Lamar's leverage could be negatively affected by additional debt-funded acquisitions, according to Moody's.