S&P downgrades Lamar

Standard & Poor's said it lowered the corporate credit rating on Lamar Advertising Co. and Lamar Media Corp. to B+ from BB-.

The outlook is negative.

The agency lowered Lamar Media's subordinated debt to B+ from BB- and revised the recovery rating to 4 from 3.

"The downgrade reflects continued weakening in the U.S. economy and its impact on our expectation for 2009 revenue and EBITDA at Lamar," S&P analyst Ariel Silverberg said in a statement.

At Dec. 31, lease-adjusted debt-to-EBITDA ratio was 6.7x.

The rating is based on the consolidated creditworthiness of parent Lamar Advertising, the agency said.

The rating reflects the company's high debt leverage and weakening adjusted credit measures, and an aggressive financial policy, the agency said.

This is somewhat tempered by Lamar's good position in the small-to-midsize outdoor advertising industry, expectation that Lamar is likely to get temporary covenant relief from its lenders later this year and for positive discretionary cash flow in 2009, S&P said.

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