Moody’s gives McClatchy notes B3

Moody’s Investors Service said it gave a B3 rating to McClatchy Co. LLC’s upsized toggle PIK note due 2027.

Concurrently, Moody’s affirmed the issuer’s B3 corporate family and B3-PD probability of default ratings, which were upgraded from Caa1 on July 8.

McClatchy used the proceeds to fund about an about $115 million dividend payment to its equity holders and to pay related expenses.

“The transaction is credit negative because it will increase leverage and cash interest expense and reduce free cash flow available for investment and debt reduction, at a time when inflation is high and consumer sentiment is uncertain,” Moody’s said in a press release.

The outlook remains stable.

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