S&P rates Alpha Media loans B+, CCC+

Standard & Poor's said it assigned a B corporate credit rating and stable outlook to Alpha Media Group Inc., a holding company formed by private-equity concern Quadrangle Capital Partners to acquire Dennis Publishing Inc. (unrated).

S&P said it assigned its B+ bank loan rating, one notch higher than the corporate credit rating, and 2 recovery rating to the company's $135 million first-lien bank facility, indicating that lenders can expect substantial 70% to 90% recovery in the event of a payment default. The facility consists of a $15 million revolving credit facility due 2012 and a $120 million term loan B due 2014.

The agency said it also assigned a CCC+ bank loan rating, two notches lower than the corporate credit rating, and recovery rating of 6 to the company's $40 million second-lien term loan due 2015, indicating the agency's expectation of negligible zero to 10% recovery in the event of a payment default.

Proceeds will be used to fund Quadrangle's acquisition of Dennis Publishing for $244 million, representing a 7.6 times multiple of trailing 12-month adjusted EBITDA at March 31.

"The rating reflects the company's earnings concentration, with Maxim, the largest of its three magazines, accounting for nearly all of its profits," S&P credit analyst Hal F. Diamond said in a written statement.

Other key issues are strong competition in the men's-lifestyle magazine niche from the internet and other entertainment sources, the agency said.

These factors are only partially offset by the competitive position of Maxim, S&P said.

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