S&P rates Paxson notes CCC+, CCC-

Standard & Poor's said it assigned its CCC+ rating to Paxson Communication Corp.'s proposed $700 million first-lien secured floating-rate notes due 2012 and also assigned a CCC- rating to Paxson's proposed $435 million second-lien secured floating-rate notes due 2013.

Proceeds from the proposed offerings are expected to be used to refinance existing debt.

The CCC+ long-term and C short-term corporate credit ratings on Paxson were affirmed. The outlook is negative.

S&P said the rating on Paxson reflects high financial risk because of the company's limited liquidity, its onerous debt and preferred stock burden, its weak EBITDA and negative discretionary cash flow, and weak audience ratings for its entertainment programming. Paxson's challenges are exacerbated by competition from well-capitalized rivals and the persistence of TV duopoly and newspaper/broadcaster ownership rules that have hampered its ability to sell assets or the entire company.

These factors, S&P said, are minimally offset by the company's valuable programming distribution platform and fairly resilient station asset values, and the company's transition to lower cost long-form programming and away from expensive entertainment programming.

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