S&P cuts LodgeNet

Standard & Poor's said it lowered its corporate credit rating on LodgeNet Interactive Corp. to D from CC.

The agency said the downgrade follows the company's failure to make the scheduled cash interest payments on its revolving credit and term loan and the scheduled term loan amortization payment on Dec. 31.

According to S&P, the company has received an extension on the forbearance agreement with its secured lenders who have agreed to accept these payments in kind and not to accelerate their claims until Feb. 5. Under S&P's criteria, the agency said it views the changing of the payment terms to payment-in-kind tantamount to a default, even with the bank's consent.

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