S&P: Central European Media view negative

Standard & Poor's said it revised to negative from stable the outlook on Central European Media Enterprises Ltd. and affirmed its BB long-term foreign- and local-currency corporate credit ratings as well as its BB ratings on $475 million senior secured convertible notes due 2013, €245 million due 2012 and €150 million notes due 2014.

The outlook revision reflects concerns rising leverage as a result of an aggressive acquisition policy, according to the agency.

Adjusted gross debt-to-EBITDA ratio is expected to approach 4x at the end of financial 2008, compared with 3.5x at Sept. 30, and below the 2.3x at Dec. 31, 2007.

The issuer's aggressive financial policy raises concerns in light of the increased macroeconomic uncertainties and lower revenue visibility in Eastern European countries, S&P said.

Ratings remain burdened by high concentration of profitability in a single television channel in the Czech Republic (foreign-currency A/stable/A-1; local-currency A+/stable/A-1) and Romanian TV channels; the potential for regulatory interference and political risks, the agency said.

These factors are mitigated by the group's leading position in the main markets in which it operates and its position as a producer of established, locally made content, the agency noted.

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