TEXT-S&P keeps Live Nation Entertainment rtg unchanged

Wed Aug 15, 2012 11:56am EDT

Aug 15 - Standard & Poor's Ratings Services said today that its 'BB-'
issue-level rating and '2' recovery rating on Beverly Hills, Calif.-based Live
Nation Entertainment Inc.'s  existing $800 million term loan B due 2016
remain unchanged following the proposed $100 million add-on term loan. The '2'
recovery rating indicates our expectation for substantial (70%-90%) recovery in
the event of a payment default. 

In addition, we assigned our 'B' issue-level rating and '5' recovery rating to 
the company's proposed $225 million senior notes due 2020. The '5' recovery 
rating indicates our expectation for modest (10%-30%) recovery in the event 
for a payment default. We expect the company to use proceeds from incremental 
term loan and the notes to repay its $304 million of outstanding 10.75% senior 
notes due 2016. As a result of the proposed transaction, we estimate the 
company to save roughly $11 million in annual interest expense, a roughly 9% 
decline in total interest expense for the last 12 months ended June 30, 2012. 
Pro forma lease-adjusted EBITDA coverage of interest is roughly 2.8x for the 
12 months ended June 30, 2012.

The corporate credit rating on Live Nation reflects our expectation that 
leverage will remain relatively high, at slightly over 5x, for the 
intermediate term, but continue to decline modestly. We expect the company 
will modestly benefit from higher ticket sales and concert attendance in the 
full year 2012. We consider the company's business profile "fair," based on 
its strong position in the live entertainment and ticketing businesses, 
notwithstanding low EBITDA margins of the concert business and increasing 
ticketing competition. (For the complete corporate credit rating rationale, 
see the summary analysis on Live Nation, published May 29, 2012, on 
RatingsDirect.)

RELATED CRITERIA AND RESEARCH
     -- Methodology And Assumptions: Liquidity Descriptors For Global 
Corporate Issuers, Sept. 28, 2011
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009

RATINGS LIST

Live Nation Entertainment Inc.
 Corporate Credit Rating                  B+/Stable/--
 $900 mil term ln B due 2016              BB-
   Recovery Rating                        2

New Ratings

Live Nation Entertainment Inc.
 $225 mil senior nts due 2020             B
   Recovery Rating                        5