S&P: Citadel Broadcasting unaffected

Standard & Poor's said the announcement by Citadel Broadcasting Corp. (B+/stable) that it amended its credit agreement to allow for voluntary prepayments on its term loans at a discount to the principal amounts has no immediate effect on the ratings.

Although the transaction could result in Citadel redeeming a portion of its bank debt at less than par, the agency said the company would be voluntarily making these payments with excess liquidity and that lenders are not obligated to accept.

S&P said the amendment comes on the heels of Citadel's settlement with a portion of its subordinated noteholders. Based on the two agreements, the company plans to use a total of $200 million of cash on hand and free cash flow generated in 2008 to reduce its subordinated notes and bank debt. Under this scenario, the issuer's debt-to-EBITDA ratio would approach 6.5 times.

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