S&P downgrades Citadel

Standard & Poor's said it lowered Citadel Broadcasting Corp.'s credit rating to CCC- from CCC and its senior secured credit facilities to CCC- with an unchanged recovery rating of 4. The agency noted that the ratings were unsolicited.

The outlook is negative.

The agency said it expects Citadel will be unable to comply with covenants in its amended credit agreement, specifically the requirement to have at least $150 million of available cash as of Jan. 15. The company generated $21.8 million of discretionary cash flow for the first six months of 2009, and cash balances stood at $27.8 million as of June 30.

The CCC- corporate credit rating reflects Citadel's high debt leverage and marginal interest coverage as a result of declining EBITDA and the June 2007 debt-financed acquisition of ABC Radio, uncertainty regarding its ability to meet covenants in early 2010, competition from larger radio operators in the majority of its markets, ongoing challenges to improving profitability at acquired stations, advertising spending volatility and significant obstacles to asset sales, S&P said.

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