OREANDA-NEWS. S&P Global Ratings said today that it affirmed its ratings on Coral Gables, Fla.-based Hemisphere Media Group Inc. and its subsidiaries, including the 'B' corporate credit rating on the company. The rating outlook remains stable.

"The affirmation follows Hemisphere Media's continued growth in retransmission and subscriber fees, driven by stable organic subscriber growth and rate increases, despite continued economic headwinds in Puerto Rico," said S&P Global Ratings credit analyst Khaled Lahlo.

The stable outlook reflects our expectation that Hemisphere Media will maintain adjusted leverage below 5x over the next 12 months, preserve sufficient liquidity for operating needs, and continue to generate positive discretionary cash flow.

We could lower our corporate credit rating on Hemisphere Media during the next 12-24 months if the company's adjusted leverage approaches 6x on a sustained basis and if its liquidity becomes strained due to an aggressive dividend repayment policy, a large debt-financed acquisition, or operational missteps the resulted in revenue declines.

Although unlikely over the next year, given the company's short track record operating as a consolidated entity, we could consider an upgrade if we become convinced that Hemisphere Media will be able to achieve meaningful growth in its affiliate fees and advertising revenues at its cable networks--while maintaining its EBITDA margin at the current level and debt leverage at 4.5x or below; and if the company grows through an acquisition, such that it materially increases its scale and improves its business risk profile by diversifying away from its exposure to Puerto Rico's advertising environment.