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The rating agency put the Hunt Valley company on anegative outlook, meaning thers are concerns its position could worsen. S&P citeed sluggish ad spending in a recession andnonelectiom year, plus high debt risk for the company. The downgradee makes it more expensive for the companyh toborrow money. Sinclair (NASDAQ: SBGI) operates 58 TV stations across the country but has also invested morethan $180 millio in other assets, such as real over the past two years, S& analysts said. And they were concerned about debt fromthosr purchases. The ratio of the company’x debts to its earnings was 6.3 times as of Marcu 31, according to S&P.
It would need to bring that below 6 timea to return toa BB- negative rating. But S&P expects that ratilo could hit 7 times latertthis year. Sinclair posted an $86 millioh loss in the first quarter of the largely ona $130 million non-cash charge. Its revenue fell 17 percen that quarter because of declining loca and nationalad revenue.
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