S&P downgrades LBI Media to CC

Standard & Poor's said it lowered its corporate credit rating on LBI Media Holdings Inc. to CC from CCC-.

The outlook is negative.

The agency expects to lower the corporate credit rating on LBI Media to SD (selective default) after the exchange offer is completed and lower the issue-level rating on the company's second-priority subordinated notes to D from C.

Thereafter, S&P said it expects to raise the corporate credit rating on LBI Media to the CCC rating category.

After the debt exchange, the agency expects the company's debt balances to increase and its liquidity profile to improve modestly following the proposed $20 million new-money investment in the new second-priority subordinated notes due 2020 and the completed sale of the KHJ radio station.

"The rating action follows the company's announcement on Nov. 20, 2014, that it has initiated an exchange transaction for its second-priority secured subordinated notes due 2020 and 8.5% senior subordinated notes due 2017," S&P credit analyst Minesh Patel said in a news release. "Under our criteria, we consider debt exchanges of distressed issuers where the timing of payments is slowed as tantamount to a default."

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