Fitch Affirms Univision Ratings; Outlook Stable

NEW YORK & CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed the following ratings of Univision Communications, Inc. (Univision):

--Issuer Default Rating (IDR) 'B';

--Senior secured bank 'B+/RR3';

--Senior secured notes 'B+/RR3';

--Second-Lien Loan 'B-/RR5';

--Senior Unsecured debt 'CCC+/RR6'.

In a filing on April 8, 2008, Univision disclosed that it borrowed $700 million from its seven year revolving credit facility to provide the company with greater financial flexibility in light of current financial market conditions. Fitch does not believe that the borrowing changes the company's financial profile or probability of default at its existing 'B' rating. The Outlook remains Stable.

While there may be some uncertainty regarding whether the drawing is related to an undisclosed adverse event, Fitch believes the forward-looking component of the Material Adverse Effect Representation (no condition has occurred that could reasonably be expected to have a Material Adverse Effect) somewhat mitigates this risk.

As detailed in a Fitch press release dated March 4th, Fitch believes the company has various alternatives to pay down its $500 million second-lien loan due March 2009, including sale proceeds from its music division, the sale of non-cash flow producing assets and the sale of non-core assets. Fitch views the company's TV stations that are not in top Hispanic markets and/or do not have duopolies (Salt Lake City, Cleveland, Raleigh) and stand-alone radio stations (Las Vegas, San Diego) as non-core. Beyond 2009, the company does not have any debt maturities until $500 million due 2011 (taking into account the delay-draw borrowing to redeem 2008 notes). Fitch believes the company will be cash flow positive over the intermediate term.

The ratings are still supported by the company's underlying portfolio of assets which include duopoly TV stations and radio stations in most of the top Hispanic markets, with a national overlay of broadcast and cable networks. The ratings are restrained from a highly leveraged capital structure that includes cash interest coverage of under 1.5x. Fitch expects the company to pay cash interest on its PIK Notes for the existing six month period, however any period with revolver availability under $300 million results in automatic PIK election on these notes (as of last night's filing, revolver availability was $18 million after deducting for letters of credit). The ratings are also restrained by the ongoing litigation disputes with Televisa. As we have mentioned before, there is limited potential for upward momentum to ratings in the future unless the company is able to agree to a longer term contract with Televisa. These concerns are balanced by Fitch's continued expectations for strong growth over the intermediate term.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.