"The CreditWatch listing of the long-term ratings reflects our expectation that fully adjusted leverage will rise meaningfully above our 4x threshold at the current rating level in 2009," said Standard & Poor's credit analyst Michael Altberg. "Our concern is most focused on local advertising weakness that has compounded adverse secular trends that have affected radio, TV, and outdoor advertising in various degrees. Our analysis also incorporates economic data available through early March on rising unemployment, record lows in consumer confidence and automotive sales, and our expectation of a GDP decline in 2009. Based on our macroeconomic concerns, we are now less confident that the company will bring leverage back below our 4x threshold in 2010."Aside from CBS, which got a Short-Term Debt cut from A-2 to A-3, S&P also assigned a Negative Outlook to advertising company Omnicom, essentially along the same parameters. To demonstrate just how little the credit market ultimately cares about rating agency opinions, the CDS of CBS barely moved today, while Omnicom actually tightened by several points.
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