S&P places Harron facility on positive watch

Standard & Poor's said it placed its B issue-level ratings on Harron Communications, LP's senior secured credit facility on CreditWatch with positive implications.

The agency said this action follows the company's announcement that it is seeking to amend its existing facility. The proposed amendments include allowing for the issuance of structurally subordinated debt, reducing the size of the revolving credit facility by $40 million to $60 million, modifying pricing, and loosening financial covenants. Along with the amendments, Harron plans to issue senior unsecured notes and use the proceeds to support a management buyout of certain existing shareholders and repay $55 million of term loan debt.

With the reduction in the size of the revolver and the $55 million prepayment, S&P said, recovery prospects for the facility could improve. Therefore, if the contemplated notes issuance is completed, S&P said it would raise the issue-level rating on the credit facility by one notch and revise the recovery rating to 2 from 3.

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