S&P rates Entravision loan B+

Standard & Poor's assigned its B+ rating and a recovery rating of 3 to Entravision Communications Corp.'s proposed $400 million senior secured bank facility and affirmed its existing ratings, including its B+ corporate credit rating, on Entravision.

The outlook is stable.

Term loan proceeds will be used to refinance Entravision's existing bank revolving credit facility, with the delayed-draw term loan available to pay off the company's remaining $67 million in preferred stock before April 1, 2005.

S&P said the ratings on Entravision reflect its high financial risk from ongoing debt-financed acquisitions, start-up operations that are restraining margins and cash flow and intensifying Spanish language media competition. Factors that partially offset these risks include its long-term strategic relationship with shareholder Univision Communications Inc., growing Spanish-language ad spending and good audience shares.

Pro forma at March 31 total debt to EBITDA, including the remaining preferred stock, is high at about 7.2x, and EBITDA coverage of interest expense is in the high-1x area.

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