McClatchy's credit rating downgraded after failure to swap debt
Posted by Emily Dilling on June 29, 2009 at 6:23 AM
Following a mostly unsuccessful attempt to swap US$1.15 billion of its $2 billion debt with noteholders, McClatchy had been downgraded to "RD" status by Fitch Ratings signifying "a default on some but not all" of the company's debt, Editor & Publisher reported.
The downgrade is not an uncommon occurrence in the industry, as credit analyst Mike Simonton pointed out when he wrote that "the ratings reflect Fitch's belief the default is imminent or inevitable. Fitch notes that more than five newspaper groups have filed for bankruptcy protection in the past six months."
The downgrade is not an uncommon occurrence in the industry, as credit analyst Mike Simonton pointed out when he wrote that "the ratings reflect Fitch's belief the default is imminent or inevitable. Fitch notes that more than five newspaper groups have filed for bankruptcy protection in the past six months."
The
offer to trade debt for discounted notes at a higher interest rate
was accepted by only 9 percent of parties with holdings in the company.
Despite their lauded attempts to buy back debt, McClatchy is still
rated as junk or a "non-investment grade" company by credit ratings
agencies.
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