S&P: CC Media on watch

Standard & Poor's said it placed its B- corporate credit rating for CC Media Holdings Inc., which it analyzes on a consolidated basis with operating subsidiary Clear Channel Communications Inc., along with all of its issue-level ratings for the company, on Creditwatch with negative implications.

The Creditwatch listing is a result of weak preliminary first-quarter results, which increases its concern over a potential financial covenant violation in late 2009, the agency added.

As of March 31, the agency said it estimates that secured net leverage per Clear Channel's credit agreement was roughly 7.1x, including its assumptions regarding add-backs to EBITDA, consisting of $100 million of expected cost savings, restructuring expenses of $129.5 million, and various other add-backs for cash received from nonconsolidated affiliates, non-cash items, and other nonrecurring gains or losses.

This compares to a 9.5x covenant, which doesn't step down until 2013, the agency added.

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