S&P drops McClatchy

Standard & Poor's said it lowered its corporate credit rating on McClatchy Co. to B+ from BB-.

The outlook is negative.

The agency said that the issue-level rating on the senior unsecured debt assumed from Knight Ridder Inc. was also lowered, to B- from B.

S&P added that the recovery rating on the Knight Ridder debt remains at 6, indicating the expectation for negligible recovery in the event of a payment default.

At the same time, S&P said it revised the recovery rating on McClatchy's unsecured credit facility to 2, indicating the expectation for substantial recovery in the event of a payment default, from 3.

The BB- issue-level rating on this debt was affirmed, S&P added, noting that the downgrade reflects meaningful declines in revenue and EBITDA in McClatchy's newspaper publishing business and the likelihood for further declines over the intermediate term.

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