OREANDA-NEWS. S&P Global Ratings said today that it assigned its 'B+' corporate credit rating to Naples, Fla.-based Beasley Broadcast Group Inc. and its subsidiary Beasley Mezzanine Holdings LLC. The rating outlook is stable.

At the same time, we assigned our 'B+' issue-level rating and '3' recovery rating to Beasley Mezzanine's proposed $20 million revolving credit facility due 2021 and $265 million term loan B due 2023. The '3' recovery rating indicates our expectation for meaningful (50%-70%; upper half of the range) recovery of principal and accrued interest for lenders in the event of a payment default.

The ratings are based on preliminary terms and are subject to review upon receipt of final documentation.

"Our 'B+' corporate credit rating reflects Beasley's relatively smaller size, geographic concentration on the U. S. East Coast, lack of meaningful diversification outside of radio broadcasting, and the secular pressures affecting radio advertising," said S&P Global Ratings' credit analyst Heidi Zhang. "The rating also reflects the company's aggressive financial risk profile, which results from the increased debt in the capital structure due to Beasley's acquisition of Greater Media Group Inc.'s radio broadcasting assets."

The stable rating outlook on Beasley reflects our expectation that the company will maintain adequate liquidity over the next year, with adjusted leverage declining to the mid-4x area due to excess debt repayment.

We could consider a downgrade if deterioration in operating performance or integration issues causes the company's deleveraging to stall, with leverage staying in the high-4x area over the next year. We could also lower the corporate credit rating if the margin of EBITDA covenant compliance falls below 15%.

Although unlikely, we could raise the rating if the company reduces leverage below 4x and commits to maintaining lower leverage over the long term while maintaining adequate liquidity. We could also raise the rating if the company meaningfully diversifies its business, expands its EBITDA margins, or the radio industry returns to some modest pace of sustainable growth.