Moody's: Gannett unchanged

Moody's Investors Service said Gannett Co., Inc.'s Ba1 corporate family rating, Ba1 probability of default rating, SGL-2 speculative-grade liquidity rating and debt instrument are not affected by news that the company increased shareholder distributions.

But, the agency said the moves are a credit negative use of cash.

The significant increase in the quarterly dividend to $0.20 from $0.08 per share will depress free cash flow and negatively affect credit metrics, Moody's said.

However, Moody's said it anticipated in the rating that Gannett would allocate a larger share of its cash flow to acquisitions and shareholder distributions after repaying more than $2 billion of debt over the last three years.

Cash generation and credit metrics are expected to remain in line with expectations for the Ba1 corporate family rating, the agency said.

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