S&P Puts Entercom Ratings on Watch List

S&P said the company has a narrow margin of compliance with the terms of its lending agreements after it borrowed heavily to finance acquisitions at a time when earnings were declining. Entercom bought 15 radio stations from CBS Corp. for $262 million last year.

Companies have to meet certain financial ratios to stay in compliance with lending terms. If they violate those terms, the lender can declare a default situation and demand more collateral or immediate repayment.

S&P put the "BB-" rating on Entercom on a watch list "with negative implications."

Entercom shares fell 51 cents, or 5 percent, to $9.67 in afternoon trading.