S&P prunes Hubbard Radio

S&P said it downgraded Hubbard Radio LLC’s issuer rating to CCC+ from B-. The company is a unit of Hubbard Broadcasting Inc., which helped it with equity injections earlier this year.

“The downgrade reflects our view that the company is dependent on favorable economic and operating conditions to refinance its upcoming debt maturities. As of Sept. 30, 2023, Hubbard's S&P Global Ratings-adjusted gross leverage was 6.4x and we anticipate it will increase to 7x by year-end 2023. This reflects our expectation that a prolonged period of slow economic growth will continue to depress advertising trends into 2024, when the company's term loan becomes current (March 2024),” S&P said in a press release.

The agency noted that Hubbard secured an amendment to its credit agreement to provide it with covenant relief.

“However, in our view, it remains reliant on HBI support to stay in compliance with its covenant. Hubbard required equity cures in the second and third quarters of 2023 to maintain compliance with its 5.5x maximum leverage covenant, which it received from HBI,” S&P said.

The outlook is negative.

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