S&P cuts Entravision

Standard & Poor's said it lowered the corporate credit rating on Entravision Communications Corp. to B from B+ and its secured debt to B from B+ with 3 recovery rating.

The outlook is stable.

"The ratings downgrade reflects Entravision's weak first-quarter operating results and our expectation of continued deterioration in credit metrics over the intermediate term, especially as we expect the company's rate of debt repayment to slow," S&P analyst Michael Altberg said in a statement.

The downgrade also considers the company's modest cushion of compliance with its financial covenants, the analyst said.

The B rating reflects Entravision's high debt leverage and narrowing cushion of compliance with financial covenants, intense Spanish-language media competition and expectation of continued weak advertising demand in 2009, the agency said.

Strengths include Entravision's long-term strategic relationship with shareholder Univision Communications Inc., favorable trends in Hispanic media and moderate portfolio diversity, S&P noted.

Lease-adjusted debt to EBITDA was 6.1x for the 12 months ended March 31, up from 5.9x at Dec. 31, 2008.

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