Moody's rates new Paxson floaters B1

Moody's Investors Service said it assigned a B1 rating to Paxson Communications Corp.'s new $365 million issuance of floating-rate notes and confirmed the company's existing ratings.

Moody's said Paxson continues to operate amid a high degree of uncertainty mostly driven by an operating strategy that cannot support the company's capital structure, despite a collection of assets with a market value that likely exceeds the company's level of debt and preferred securities.

Consequently, Moody's said its ratings consider the possibility of a sale of the enterprise, individual asset sales and/or the potential for a new operating strategy when rating the company's securities.

Over the short term, and particularly once the proposed financing is in place, Paxson will have a fair amount of financial flexibility. Over the medium term, Paxson will be forced to take action that puts the company's more junior securities at risk of impairment.

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