Moody's drops Gannett to junk

Moody's Investors Service said it downgraded Gannett Co., Inc.'s senior unsecured notes to Ba2 (LGD5, 85%) from Baa3 and the commercial paper rating to Not Prime from Prime-3, and also assigned a Ba1 corporate family and probability-of-default ratings, and a SGL-3 speculative-grade liquidity rating.

The outlook is stable. The actions conclude the review for downgrade that began on Feb. 2.

The downgrade reflects expectation that changing media consumption habits and the heightened level of price and volume competition that Gannett faces as it seeks to monetize its strong local-market content positions in its traditional media and newer digital distribution channels will continue to erode operating cash flow, according to the agency.

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