S&P cuts Lamar outlook to negative

Standard & Poor's said it revised its outlook on Lamar Advertising Co. to negative from stable.

At the same time, the agency said it affirmed its ratings on the company, including the BB- corporate credit rating.

The agency said that the outlook revision reflects the rapidly weakening economy's impact on EBITDA and credit measures, which are likely to be weak for the rating over the intermediate term.

According to S&P, it expects that EBITDA in 2008 could decline in the high-single-digit percentage area year over year, and that 2009 EBITDA generation could fall in the mid-teens percentage area.

While the agency said it anticipates that Lamar will generate sufficient free cash flow during 2009 to fund moderate levels of discretionary spending and about $58 million in term loan amortization, as well as repay a portion of 2008 revolver balances, it expects EBITDA declines will result in adjusted debt leverage that could reach 7.0x.

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