S&P, Moody’s may raise McClatchy’s debt ratings

NEW YORK, Jan 27 (BestGrowthStock) – Standard & Poor’s and Moody’s
Investors Service on Wednesday said they may raise their
ratings on McClatchy Co (MNI.N: ) after the newspaper publisher
unveiled a plan to give it more time to pay off debt.

McClatchy, which publishes the Miami Herald and Sacramento
Bee, also posted a quarterly profit, reversing a year-ago loss,
helped by an improved advertising climate. For details click on
[ID:nN27173349].

McClatchy said it will issue $875 million in senior notes
due in 2017 and use proceeds to help repay debt due in 2011 and
2014. The company is also extending the maturity on about 90
percent of its credit facility by two years to July 2013.

“Completion of the proposed transactions would extend
McClatchy’s next meaningful maturity to 2013,” S&P said in a
statement. The company will also benefit from some relief in
its newspaper advertising revenues, S&P said.

After a 27 percent drop in 2009, advertising revenue should
decline by just 10 percent in 2010, the rating agency said.

S&P said it expects to raise McClatchy’s rating to B-minus,
the sixth-highest junk rating, from CC, the 10th-highest junk
rating.

Moody’s said the transactions “would meaningfully improve
the company’s liquidity position and reduce near term default
risk.” It said it may raise McClatchy’s rating, which is now
Caa2, its eighth-highest junk rating.

McClatchy’s 4.625 percent notes due in 2014 rose to 73.4
cents on the dollar on Wednesday, up 1.4 cents on the day,
according to MarketAxess. Its 7.125 percent notes due in 2011
rose to 102 cents on the dollar from 98 cents on Jan. 12, their
previous significant trade.

Investment Analysis

(Reporting by Dena Aubin; Editing by Leslie Adler)

S&P, Moody’s may raise McClatchy’s debt ratings