S&P rates Hubbard loans B+, CCC+

Standard & Poor's said that it assigned a preliminary B corporate credit rating to Hubbard Radio LLC.

The outlook is stable.

S&P assigned a preliminary B+ issue-level rating to the company's $280 million senior secured first-lien credit facilities, with a preliminary recovery rating of 2, indicating the expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default.

S&P also assigned a preliminary CCC+ issue-level rating to the company's $140 million second-lien term loan C, with a preliminary recovery rating of 6, indicating the expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default.

The first-lien credit facilities consist of a $10 million revolving credit facility due April 2016 and a $270 million term loan B due April 2017. The proceeds, along with a $132 million cash equity contribution, will be used to fund the acquisition of 13 radio stations from Bonneville International Corp.

The ratings on Hubbard reflect the company's highly leveraged financial risk profile, characterized by lease-adjusted leverage of 5.8x following the transaction, the agency said.

Hubbard's business risk profile is weak because of risks related to longer term structural issues facing the radio industry, the company's small station portfolio and its revenue concentration in Chicago and Washington, D.C., the agency added.

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