‘Akron Beacon Journal’ Parent Debt Burden Increasing, S&P Warns In Downgrade

Fitz: Standard & Poor's Ratings Services Monday lowered its long-term corporate credit rating and senior secured debt ratings on Black Press Ltd.’s U.S. and Canadian newspaper subsidiaries, saying weak ad revenue is squeezing liquidity and raising debt burden.

The downgrade to B- from B pushes Victoria, British Columbia-based Black farther into junk bond territory. By S&P’s definition, the lower rating suggests a company currently has the capacity to meet its financial commitments on an obligation, but “adverse business, financial, or economic conditions will likely impair” its capacity or willingness to meet the obligation.

S&P said its outlook on Black is negative, meaning another ratings downgrade could be in the works.

S&P also ratcheted down Black’s so-called recovery rate to 4 from 3, saying creditors can expect “average” recovery of 30% to 50% of their money in the event of a payment default. A 3 recovery rating indicates a “meaningful recovery” of 50% to 70% under S&P’s definition.

"The downgrade reflects Black Press' lower profitability, which is contributing to the company's weak liquidity, possible noncompliance with financial covenants, and increased debt leverage," S&P credit analyst Lori Harris said.

S&P said revenue and EBITDA at Black Press were “down materially” in its fourth quarter ended Feb. 28 as a result of a drop in ad revenue at its U.S. and Canadian papers. Among its dailies are the Honolulu Star-Bulletin and Akron (Ohio) Beacon Journal.

S&P said it expects “Black Press' operating performance, credit ratios, and financial flexibility are likely to remain weak in fiscal 2010, driven by expected soft EBITDA and elevated debt levels.”

Comments

[fleeseenizina]

Questions and answers about Beach hotel southern california and On the beach poster http://beach.goodnanoav.com/

[anydaycoone]

Read more hot reports about Business, Form business or Women small business loans http://business.goodnano-av.com/