S&P cuts Advanstar view to negative

Standard & Poor's said it revised its outlook on Advanstar Communications Inc. to negative from stable.

At the same time, S&P affirmed its existing ratings on the company, including its B corporate credit rating, B+ first-lien bank debt rating, B- second-priority secured debt rating and CCC+ subordinated debt rating.

S&P said the outlook change follows Advanstar's announcement that it is selling its trade show, publishing, and other businesses serving five sectors. Gross proceeds for these assets, which produced about 27% of the company's revenue, will total $185 million.

Advanstar has not specified for what the proceeds will be used, which creates some concern. Barring a substantial debt reduction, the lost profit from the sold assets will weaken the company's already marginal total interest coverage, modest discretionary cash flow, and high debt leverage. In addition, using the excess liquidity from the sale for acquisitions may not improve the company's business or financial profile from that which existed prior to the asset sales, S&P said.

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