S&P lowers McClatchy

Standard & Poor's said it lowered McClatchy Co.'s corporate credit rating to BB from BB+ and removed its ratings from CreditWatch, where they were placed with negative implications Oct. 17.

The outlook is negative.

According to S&P, the rating downgrade is a result of slashed newspaper advertising revenue and lower-than-expected cash flow generation over the intermediate term.

The BB rating reflects high debt leverage and negative operating trends in McClatchy's newspaper business, even though the company is expected to repay more than $450 million in debt balances in 2008, the agency said.

Leverage target as measured by a total lease and unfunded pension adjusted debt-to-EBITDA ratio at the BB level is about 4.5 times and below, S&P said.

S&P: Coinmach still on watch

Standard & Poor's said Coinmach Service Corp. B corporate credit rating remains on CreditWatch with negative implications following the company's acquisition by Babcock & Brown Ltd. and a group of financiers for $13.55 per share in cash.

The agency said the watch continues to reflect expectation that leverage has grown following the deal although financing terms have yet to be disclosed.

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