S&P ups Local TV

Standard & Poor's said it raised the corporate credit ratings on Local TV LLC and operating subsidiary Local TV Finance LLC to B from B-.

The outlook is stable.

S&P revised the recovery rating on Local TV Finance's senior secured credit facilities to 2, indicating the expectation of substantial (70% to 90%) recovery in the event of a payment default, from 3 (50% to 70%). The issue-level rating on the debt was raised to B+ from B-.

S&P also raised the issue-level rating on Local TV Finance's senior notes to CCC+ from CCC in conjunction with the corporate credit rating change. The recovery rating on this debt is unchanged at 6, indicating the expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default.

The upgrade reflects Local TV's improved liquidity and credit metrics as a result of a recovery in advertising demand and a significant increase in political advertising revenue in 2010, the agency said.

The ratings reflect Local TV's highly leveraged financial risk profile, characterized by lease-adjusted leverage of 7.0 times at the end of 2010 and the expectation of modest discretionary cash flow in 2011 as well as Local TV's weak business risk profile and its revenue concentration in CBS-affiliated stations, the agency added.

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