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MediaNews' debt rating cut to CCC from B-

By David Milstead, Rocky Mountain News (Contact)

Published June 19, 2008 at 9:05 p.m.

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Standard & Poor's cut its ratings on the debt of MediaNews Group, the owner of The Denver Post and 56 other daily newspapers, and warned that the company may face a restructuring "over the intermediate term."

Denver-based MediaNews has posted declining revenue and cash flow as part of an overall newspaper-industry decline.

S&P cut its rating on Media News two notches to CCC from B-. That puts Media News in the lower half of the high-yield or "junk bond" ratings, four levels above default.

S&P has previously said that MediaNews' partners, which include Hearst and Rocky Mountain News owner E.W. Scripps, could help the company if it continued its decline.

But analyst Emile Courtney said Thursday "it is unclear whether business partners will continue to support MediaNews if the operating environment continues to deteriorate. Moreover, we believe that the company is unlikely to maintain its current capital structure over the long term. At the current rate of cash flow decline, it appears increasingly likely that Media News will pursue a restructuring of some kind over the intermediate term."

MediaNews President Joseph "Jody" Lodovic issued a statement: "We are in compliance with all our debt agreements and expect to stay in compliance in the future."

Comments

  • June 20, 2008

    7:57 a.m.

    Suggest removal

    thats_just_me writes:

    hmmmmmmmmm could it be that the decline in the newspaper industry is in any way related to the decline in newspaper reporting?