S&P rates WRC media loan

Standard & Poor's said it assigned its B rating to the $30 million amended and restated first-lien senior secured bank revolving credit facility due 2008 of WRC Media Inc.'s operating subsidiaries, Weekly Reader and CompassLearning Inc.

At the same time, S&P assigned its B- rating to Weekly Reader and CompassLearning Inc.'s $145 million second-lien senior secured term loan due 2009. Both of these ratings were placed on CreditWatch with negative implications.

Proceeds of the second-lien facility were used to refinance the company's existing term debt, pay off revolving credit borrowings, and provide roughly $6 million in cash for general corporate purposes.

The refinancing was critical to avoid a potential liquidity crisis and financial covenant violation that would have occurred with the expiration of a waiver on March 31.

Nonetheless, the ratings, including its B corporate credit rating, remain on CreditWatch with negative implications due to concerns about the pending re-audit of its 2001 financial statements and the preliminary SEC inquiry into its financial policies and practices.

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