S&P Has Some 'Negative' News For Clear Channel
December 14, 2011 at 10:42 AM (PT)
STANDARD & POOR'S Ratings Services has revised its rating outlook on CC MEDIA HOLDINGS INC., and its operating subsidiary CLEAR CHANNEL COMMUNICATIONS INC. from positive to negative, reports REUTERS. S&P's corporate credit rating for CLEAR CHANNEL is 'CCC+'.
"The outlook revision reflects our view that softening ad demand and global economic uncertainty could slow the pace of revenue growth at CC MEDIA over the intermediate term, heightening refinancing risk around its 2014 and 2016 debt maturities," said STANDARD & POOR'S Credit Analyst MICHAEL ALTBERG.
S&P wrote, "The 'CCC+' corporate credit rating reflects the risks surrounding the longer-term viability of the company's capital structure -- in particular, refinancing risk relating to sizable secured and unsecured debt maturities in 2014 ($2.9 billion) and 2016 ($12.3 billion). We view CC MEDIA's financial risk profile as 'highly leveraged' (based on our criteria), given the company's significant refinancing risk, very slim EBITDA coverage of interest expense, and minimal discretionary cash flow compared to its debt burden. In our view, the company has a 'fair' business risk profile, because of its position as the largest U.S. radio and global outdoor advertising operator."