Moody's ups Radio One

Moody's Investors Service said it will upgrade Radio One, Inc.'s corporate family rating to B3 from Caa1 and its probability of default rating to B3 from Caa2 pending closing of their proposed note exchange, debt refinancing and purchase of additional interests in TVOne. The agency also said it will assign a Ba3 (LGD 1, 1%) rating to its $50 million senior secured revolving facility due 2014, B1 (LGD 2, 24%) rating to its $350 million senior secured term loan B due about 2016, B3 (LGD 4, 55%) rating on its new second-lien notes due 2016 and a Caa2 (LGD 5, 82%) to its new senior unsecured exchange notes due 2017. To the extent portions of the notes remain outstanding after the exchange, the agency also said it will upgrade at closing the 8.875% senior subordinated notes due 2011 to Caa2 (LGD 6, 96%) from Caa3 (LGD4, 69%) and 6.375% senior subordinated notes due 2013 to Caa2 (LGD 6, 96%) from Caa3 (LGD 4, 69%)

The outlook will be revised to stable.

The upgrade is driven by the extended maturity of the new debt, increased flexibility under its financial covenants and an expectation of stronger performance going forward, Moody's said.

Moody's noted that the proposed exchange offer for the existing subordinated notes will be considered a limited default as the notes are being exchanged for less than face value, the agency said.

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