EARNINGS ANALYSIS: Scripps Raises Political Ad Revenue Guidance to ‘At Least’ $340M in 2024, Expects to Reduce Leverage to High-4x Range by Year-End; Sale of Bounce TV Postponed to 2025 Due to Failure to Agree on Terms With Prospective Buyer

Credit Research: Anton Mozgovoj Relevant Document: Press Release E.W. Scripps disclosed this morning, alongside its third-quarter results, that it anticipates reducing its leverage to the high-4x range by year-end. The company previously anticipated reducing leverage to the low-to-mid-5x range by year-end. However, higher-than-expected political advertising revenue has allowed the company to revise its guidance. Net leverage was 5.1x at the end of the third quarter, down from 6x in the second quarter, driven by better-than-expected third-quarter EBITDA stemming from record political advertising revenue and expense management efforts, according to the earnings report. The credit agreement governing the RCF and the 2026 and 2028 term loans provides for an “available amount” builder basket that Scripps can access, as long as its pro forma total net leverage ratio is below 5x. This implies that, should the company achieve leverage in the high-4x range, this basket may be available to potentially expand the refinancing options for its 2027 unsecured notes, assuming there is enough capacity under this basket to make a considerable impact. Octus’ analysis on the potential refinancing options for Scripps’ 2027 unsecured notes and the limitations imposed by the credit agreement and bond indentures are further discussed HERE. On its third-quarter[...]