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Announcement:

Moody's Places Radio One's Ratings on Review for Possible Downgrade

18 Aug 2010

Approximately $650 million of rated debt affected

New York, August 18, 2010 -- Moody's Investors Service placed on review for possible downgrade Radio One, Inc.'s ("Radio One") Caa1 Corporate Family Rating ("CFR"), its Caa2 Probability of Default Rating ("PDR") (LD will be assigned to the PDR upon completion of the proposed exchange), and debt instrument ratings as outlined below. The review was driven by the company's announcement that Radio One's bank group blocked its August 15 interest payment on the 6.375% senior subordinated notes due 2013. The bank group has the ability to block the interest payment as Radio One has been in violation of the total leverage covenant under its credit agreement as announced in July.

For the three months ended June 30, 2010, the company reported revenues of $75.2 million in line with expectations and 7.6% ahead of revenues for the same calendar quarter last year. The company's ability to continue to track its plan for the remainder of 2010 and for FY2011 remains an important part of our rating assessment. Moody's believes that recovery in a distressed scenario would be greater than 50%-60% due to Radio One's attractive markets and improved operating performance. Bank facilities are well positioned based on their first priority, secured position ahead of the subordinated notes.

The current ratings are based on Moody's estimate of the expected near term loss and are under review pending the end of the grace period (30 days ending September 16 when the blocked interest payment constitutes a default) or potential review of final terms of the proposed note exchange, refinancing of bank facilities, or modifications to the existing debt. If the company has not made the interest payment by the end of the grace period, Moody's will likely lower the probability of default rating to LD. Under the forbearance agreement with its lenders expiring September 10, 2010, the company no longer has access to its revolver, the company is required to fund monthly interest payments at the default rate (2% penalty + LIBOR + applicable margin), and financial summaries need to be provided each week. In addition, if the company does not make the interest payment on the 6.375% senior subordinated notes within the grace period, bank credit facilities become due immediately and the trustee or holders of at least 25% of the 6.375% senior subordinated notes can declare immediate payment.

While the company may succeed in coming to an agreement with its lenders and make the payment prior to the expiration of the grace period, Moody's views the blockage as an indication of a greater risk of default and potential for debt impairment given the current acceleration of maturities of approximately $354.6 million in bank facilities to January 1, 2011 absent success in the planned exchange/refinancing of the 8.875% senior subordinated notes due 2012. The bank facilities were scheduled to mature June 2012; however, the maturity is accelerated if the 8.875% senior subordinated notes are not refinanced six months prior to their July 1, 2011 due date. The company reports that 89.8% of the notes have been validly tendered versus the 95% requirement, and the exchange offer is currently extended to August 30, 2010.

The following ratings were placed on review for possible downgrade:

Corporate Family Rating - Caa1

Probability of Default Rating - Caa2 (LD will be assigned to the PDR upon completion of the proposed exchange)

$400 million existing senior secured revolving facility --B2, LGD2-17%

$31.6 million ($300 million original amount) existing first lien term loan --B2, LGD2-17%

The following ratings are not on review for downgrade; however the LGD's are updated:

8.875% senior subordinated notes due 2011 -- Caa3, LGD6-96% from Caa3, LGD4-69%

6.375% senior subordinated notes due 2013 -- Caa3, LGD6-96% from Caa3, LGD4-69%

Moody's most recent rating action for Radio One was on June 17, 2010 when Moody's rated instruments related to the company's proposed exchange offer and refinancing.

For assignment of these ratings, Moody's used its methodology for the Global Broadcast Industry, which can be found at www.moodys.com in the Rating Methodologies sub-directory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

Radio One Inc., headquartered in Lanham, Maryland operates or owns interests in broadcasting stations, a cable television network, and Internet-based properties, largely targeting the African-American audience. The company reported sales of approximately $276 million through the 12 months ending June 30, 2010.

New York
Christina Padgett
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Carl Salas
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
USA

Moody's Places Radio One's Ratings on Review for Possible Downgrade
No Related Data.
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