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S&P cuts LBI Media
Standard & Poor's said it lowered its corporate credit rating on LBI Media Inc. to D from CC.
The agency said the rating actions stem from parent LBI Media Holdings' disclosure that it did not make the interest payment on its 11% senior discount notes due Oct. 15. Additionally, LBI Media announced the eighth extension of its subpar debt exchange offer for the 8.5% senior subordinated notes due 2017 and 11% senior discount notes due 2013.
According to S&P, if the discount notes interest payment default is not addressed by Nov. 14, holders of at least 25% of the outstanding principal amount of the discount notes can accelerate the debt, resulting in a cross-default on the company's other debt.
If obligations outstanding under the discount notes are not accelerated, an uncured default by LBI Media Holdings on more than $10 million on indebtedness will constitute an event of default under LBI's existing debt agreements.
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