S&P Global Ratings moved Urban One Inc.'s corporate rating to 'CCC+' from 'SD' (selective default) following the company's repurchase of a portion of its second-lien notes at significant discounts during the first four months of 2026. At the same time, S&P raised the issue-level rating on those second-lien notes to 'CCC+' from 'D' and adjusted the recovery rating higher to '4' from '5'. The ratings agency maintained a negative outlook on the company.
The buybacks reduced Urban One's outstanding second-lien obligations by about $56 million, bringing the remaining balance of those notes to $235 million. Based on this reduction, S&P expects the company's adjusted gross leverage to fall modestly to roughly 8.6x in 2026 from 8.8x at the end of 2025.
Despite the upgrade, S&P emphasized that Urban One's financial position still relies on favorable operational and macroeconomic conditions. The agency pointed to declining EBITDA and cash flow tied to secular pressures in broadcast radio and cable TV as key vulnerabilities. Those revenue challenges, the agency said, leave the company dependent on improving business and economic trends to meet its obligations.
S&P flagged changes in advertiser behavior as a specific headwind. The ratings agency noted that advertisers are trimming spending on diversity, equity, and inclusion initiatives - an important advertising category for the company. It also highlighted that Urban One derives most of its revenue from national advertising, which S&P expects will continue to lag local advertising because brand-oriented national ad spend is seen as more expendable than direct response spending.
On liquidity, S&P reported that as of March 31, 2026, Urban One held about $27 million in cash and had $32 million of availability under its asset-based lending (ABL) facility. The ratings agency projected the company would generate approximately $20 million of free operating cash flow over the next 12 months. Subsequent to quarter end, the company drew an additional $10 million on its ABL, increasing total outstanding borrowings under the facility to $20 million; management expects to repay those borrowings before the end of the year.
In terms of maturity profile, the bulk of Urban One's debt comes due in 2030-2031, with only $7.5 million maturing in 2028. S&P warned it could downgrade the rating again if it anticipated a default within the next 12 months driven by an acceleration of secular declines or if the company pursued further below-par debt repurchases or a restructuring that S&P would view as tantamount to a default.
Contextual note - The ratings move reflects the immediate balance-sheet relief from the discounted repurchases while underscoring that operational trends and advertiser behavior will determine longer-term credit stability.