S&P: Entercom on watch

Standard & Poor's said it placed its ratings on Entercom Communications Corp., including the BB- corporate credit rating, on CreditWatch with negative implications.

The agency said that the CreditWatch placement reflects Entercom's narrow margin of covenant compliance for the total debt leverage ratio under the credit facility because of debt financed acquisitions and EBITDA deterioration.

As of Dec. 31, pro forma for Entercom's acquisition of 15 radio stations from CBS for $262 million, the divestiture of its Austin FM station and subsequent debt repayment in January 2008, leverage per lenders' calculations was 5.6x compared to a covenant of 6.0x, leaving only a 6% cushion against further EBITDA decline, the agency added.

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