Moody's may downgrade Radio One

Moody's Investors Service said it placed Radio One, Inc.'s Ba3 corporate family and probability-of-default ratings, Ba1 (LGD2, 25%) secured revolving credit facility and secured term loan and B1 (LGD5, 81%) 6 3/8% senior subordinated notes and 8 7/8% senior subordinated notes on review for possible downgrade following the delay in the filing of the company's 10-K report for the year ended Dec. 31 while it completes a review of its historical stock option granting practices.

The review reflects Moody's concerns regarding the potential for technical default under the company's bank credit facilities and bond indentures should the financial statements for the period ending Dec. 31 not be filed within the specified time periods. In addition, the Securities and Exchange Commission is conducting an informal inquiry related to the company's accounting for stock option grants, and the agency is concerned about the size of restatements, the potential tax consequences thereof and the resulting impact on the credit metrics of the company.

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