S&P lowers Entercom

Standard & Poor's said it lowered Entercom Communications Inc.'s long-term corporate credit rating to B+ from BB- and Entercom Radio LLC's $150 million 7 5/8% notes due 2014 to B- with an unchanged recovery rating of 6 from B.

The outlook is stable.

The agency said the downgrade reflects the company's narrow margin of covenant compliance and S&P's concern that despite cost-cutting initiatives and Entercom's recent termination of its dividend, currently weak advertising demand will continue to pressure earnings and cash flow over the intermediate term. As of Sept. 30, leverage was 5.3 times versus a 6.0 times net leverage covenant, which has no scheduled stepdowns.

More positively, S&P expects the company will continue to generate healthy discretionary cash flow in 2009, which can be used for debt repayment and to replenish cash balances.

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