S&P lifts Allbritton, rates notes B

Standard & Poor's said it raised its corporate credit rating on Allbritton Communications Co. to B from B- and assigned to its proposed $455 million senior notes due 2018 a B rating with a recovery rating of 4, indicating an expectation of 30% to 50% recovery for noteholders in the event of a default. The rating is in line with the company's B corporate credit rating.

The outlook is stable.

The company plans to use net proceeds to finance the purchase of its existing $455 million subordinated notes due 2012 pursuant to a tender offer, S&P said.

The upgrade reflects Allbritton's recent EBITDA turnaround and modest discretionary cash flow generation, which is expected to continue as the economic recovery strengthens, the agency said.

The ratings also reflect Allbritton's still-high debt leverage, earnings and cash flow concentration as a result of limited portfolio diversity, the cyclicality of TV ad revenue and a track record of shareholder-favoring financial policies, the agency said.

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