S&P: LBI Media outlook negative

Standard & Poor's said it revised its outlook on LBI Media Inc. to negative from stable and affirmed its ratings, including the B corporate credit rating.

The outlook revision reflects the agency's concern about the company's high debt leverage and negative discretionary cash flow in light of the onset of cash interest payments on its 11% discount notes starting April 15, 2009.

S&P said the B rating reflects LBI's high leverage, cash flow concentration in a small number of large U.S. Hispanic markets, intense competition for audiences and advertisers from much larger rivals and its acquisitive debt-financed growth strategy.

The company's niche position as an operator of Spanish-language radio and TV stations, its high EBITDA margin relative to peers, broadly favorable Spanish-language advertising trends and largely resilient station asset values minimally offset these risks, the agency said.

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