S&P ups Entercom second-lien notes to B

S&P said it raised its issue-level rating on the 6½% senior secured second-lien notes due 2027 sold by Entercom Communications Corp.’s subsidiary Entercom Media Corp. to B from B- and revised the recovery rating to 5 from 6. The 5 recovery rating reflects S&P’s expectation for modest (10%-30%; rounded estimate: 15%) recovery for lenders in the event of a payment default.

Entercom plans to offer a $100 million add-on to its $325 million of second-lien notes. The company intends to use the proceeds to repay a portion of its first-lien term loan B with $867 million outstanding. While the company’s total amount of debt will remain unchanged, the reduced amount of first-lien debt in its capital structure increases the value available to the second-lien lenders, S&P said.

Entercom’s B+ rating and stable outlook are unchanged, because the proposed transaction won’t affect the company’s net leverage, S&P said.

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