S&P rates Gallery Media notes, loan B-

Standard & Poor's said that it assigned a B- long-term corporate credit ratings to Gallery Media Holding Ltd. BVI and its subsidiary Gallery Services LLC.

The outlook is stable.

S&P assigned an issue rating of B- to the $100.3 million of senior secured notes due 2015 issued by special purpose vehicle European Media Capital SA. S&P also assigned a recovery rating of 3 and an issue rating of B- to the underlying proceeds loan borrowed by Gallery Services (B-/stable). A recovery rating of 3 indicates meaningful recovery (50%-70%) in the event of a payment default.

The ratings reflects the group's highly leveraged financial risk profile, limited financial resources and flexibility, exposure to cyclical advertising revenues in Russia and Ukraine and significant contract renewal risks over the next two years, the agency said.

The ratings also consider Gallery's position as the second-largest outdoor player in Russia and Ukraine, its sound profitability and its low maintenance capital requirements, despite a relatively high fixed cost base, the agency added.

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