S&P lowers Cumulus, notes

S&P said it lowered its corporate credit ratings on Cumulus Media Inc. and its subsidiary Cumulus Media Holdings Inc. to SD (selective default) from CCC.

At the same time, the agency lowered the issue-level rating on Cumulus' 7¾% senior notes due 2019 to D from CC. The 6 recovery rating indicates an expectation for negligible recovery (0%-10%; rounded estimate: 0%) of principal in the event of a default.

S&P said the downgrade follows Cumulus' recent announcement that it didn't make a $23.6 million interest payment on the senior notes.

“We believe the company made the decision to not make the payment in order to preserve cash or put pressure on its bondholders to participate in a subpar debt exchange, given that it has sufficient cash on hand to make the interest payment,” the agency said in a news release.

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