Belo Retains Fitch Investment-Grade Debt Rating

By: E&P Staff Fitch Ratings has affirmed its BBB- rating for Belo Corp.'s issuer default ratings (IDR) and for its senior unsecured notes and unsecured bank facility.

New York City-based Fitch said it rates Belo's outlook as "stable."

"The ratings continue to be supported by the company's strong local presence in the top 50 U.S. markets, solid free cash flow generating ability, and fiscal policies consistent with a BBB- rating given the company's operating risk profile," Fitch said.

BBB- is the agency's lowest investment-grade rating.

Fitch said that while Belo, publisher of The Dallas Morning News, two other big dailies and 19 television stations, faces "secular" challenges from new media, it added the company is well-positioned to meet those challenges.

"Importantly, Fitch believes the free cash flow dynamics of Belo's existing businesses continue to give the company lead-time necessary to face these industry challenges," the rating agency said. "As such, Belo has continued to make prudent adjustments to its cost structures over the last year without directly affecting revenue and thereby maintaining financial flexibility."

It said Belo's liquidity is "solid," with a $1 billion credit facility that has not yet been tapped, plus $46 million in cash on hand as of last Dec. 31.

Fitch said it expects Belo's free cash flow after dividends to be in the range of $75 million to $125 million over the next few years.

Belo has "material maturities" of $235 million due June 2007, and $350 million due November 2008, Fitch said. A remaining $700 million of debt matures 2013 and beyond, the agency said.


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