RLPC-UPDATE 1-Univision draws down $700 mln of revolving loan

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NEW YORK, April 8 (Reuters) - Spanish language broadcaster Univision Communications on Tuesday drew down $700 million of a $750 million revolving credit line to access liquidity as banks begin to tighten lending standards, sources told Reuters Loan Pricing Corp.

"Univision's business is performing well in the current environment, but with lenders under pressure in today's unsettled financial markets, the company believes it is prudent to access its committed bank financing for general corporate purposes," a Univision spokesperson told Reuters LPC.

"Univision's revenues for the 2008 first quarter were up year-over-and the company is expecting a strong 2008-2009 upfront," the spokesperson added.

Univision is the latest of several companies to draw down revolving credit lines. CIT Group Inc. (CIT.N: Quote, Profile, Research) last month drew down $7.3 billion of bank lines to help fund daily operations, highlighting its struggle to raise cash to pay off debt.

With the economy in the doldrums and banks tightening lending standards, companies will have no choice but to draw on revolver lines or sell assets to access liquidity, Morgan Stanley said in a report on Monday.

"The implications are negative for lenders and ultimately issuers," Morgan Stanley said. For lenders, the payout on revolvers is unattractive, while issuers may run the risk of breaching lending covenants as their leverage rises, Morgan Stanley said.

Univision, which was taken private last year in a $14 billion leveraged buyout, had its ratings cut by Standard & Poor's in March by a notch to "B-minus," reflecting the lower than expected asset sale proceeds for Univision's music division. S&P said at the time the company would be challenged to cover its $500 million second-lien asset sale bridge loan.

Following the draw-down, the company's $7 billion covenant-lite term loan fell to around 74 cents on the dollar, down about 5 cents, while its 9.75 percent notes due 2015 have eased 4-5 points to a range of about 56-to-57.

Also, its five-year loan credit default swaps are 100 basis points wider in the 800-to-850 basis point range following the drawdown, said a dealer. (Reporting by Thomas Ryan)