S&P affirms Radio One

Standard & Poor's said it affirmed Radio One Inc.'s B corporate credit rating and removed it from CreditWatch, where they were placed with negative implications Feb. 26.

The outlook is negative.

The agency assigned a recovery rating of 6 to Radio One's senior subordinated debt with a CCC+ rating.

S&P said the affirmation reflects Radio One's increased headroom against financial covenants following the sale of its Los Angeles radio station and a subsequent debt repayment of roughly $69 million.

The B corporate credit rating reflects Radio One's high debt leverage and narrow margin of covenant compliance, intense competition from Hispanic and urban broadcasters, pressure from nontraditional media, radio advertising cyclicality and uncertainty surrounding the company's online segment, the agency said.

These factors are only partially offset by Radio One's good competitive position targeting the African-American audience, its progress toward greater cash flow diversification and largely resilient station asset values in large markets, S&P noted.

Lease-adjusted debt-to-EBITDA ratio was 8 times for the 12 months ended June 30.

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