S&P rates NextMedia loans B, CCC+

Standard & Poor's said it assigned a B bank loan rating and a recovery rating of 3 to NextMedia Operating Inc.'s proposed $290 million first-lien secured credit facilities. The first-lien facilities consist of a $50 million revolving credit facility and a $240 million term loan.

At the same time, S&P assigned a CCC+ bank loan rating and a recovery rating of 5 to NextMedia's proposed $100 million second-lien secured term loan.

The corporate credit rating of B was affirmed. The outlook is stable.

Borrowings under the facilities are expected to be used to refinance existing debt, to help fund acquisitions and for general corporate purposes.

S&P said the ratings on NextMedia reflect high financial risk from debt-financed expansion, the likelihood of additional acquisitions that could limit financial profile improvement, the presence of larger competitors in most markets, and the company's vulnerability to advertising downturns. These factors are only partially offset by the company's expanding portfolio of radio and outdoor assets, broadcasting's good margin and discretionary cash flow potential and sustainable asset values.

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