S&P rates Rainbow loan B+

Standard & Poor's said it assigned its B corporate credit rating to Rainbow Media Enterprises Inc. and its national programming subsidiary, Rainbow National Services LLC.

The outlook is negative.

S&P also assigned its B+ bank loan rating to Rainbow National's $950 million in secured bank debt along with a recovery rating of 1, and a CCC+ rating was assigned to Rainbow National's $250 million senior unsecured notes due 2012 and $550 million senior subordinated notes due 2014.

Proceeds from these debt issuances will be used to repay about $725 million in existing bank debt as well as fund requirements of the DBS operation.

Notwithstanding the strength of Rainbow Media's national programming business, S&P said the rating is dominated by the extremely high business risk of the company's consumer video product, given its late introduction to the market relative to competitors EchoStar Communications Corp. and The DirecTV Group Inc. Competition from incumbent cable TV operators also contributes to the high business risk.

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