Moody's May Cut Clear Channel Rating
February 6, 2009 at 12:25 PM (PT)
MOODY's Investors Service on FRIDAY said it may cut its ratings on CLEAR CHANNEL COMMUNICATIONS deeper into junk territory and also warned the company may breach its debt covenants as its radio advertising revenues decline, reports REUTERS. MOODY's said it may cut CLEAR CHANNEL from "B2," five steps below investment grade.
"The rating action reflects MOODY's concern that radio revenues in 2009 will turn out to be lower than expected and the company's cash flow could decline to levels that would weaken credit metrics and cause a breach of financial covenants," MOODY's said in a statement.
"Radio industry revenues broadly appear to be pacing down in excess of 20% through JANUARY, and outdoor revenues appear to be trending worse than anticipated, particularly international revenues which are being adversely impacted by foreign exchange movements in addition to economic weakness," MOODY's added.
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