Moody's: McClatchy outlook developing

Moody's Investors Service said it changed McClatchy Co.'s outlook to developing from negative following the company's plans to try to extend its credit facility due June 2011 by up to two years and amend term to permit it to incur $875 million of senior secured refinancing debt.

The agency said it anticipates McClatchy's advertising revenue will remain under pressure over the next 12 to 18 months, although declines are expected to continue the moderating trend being experienced in the fourth quarter.

McClatchy's debt-to-EBITDA leverage of 8.6x for the 12 months ended Sept. 27 is at an unsustainable level, according to the agency.

Pushing out maturities would provide McClatchy additional flexibility to manage through the advertising downturn and realize the potential de-leveraging benefits of a cyclical advertising recovery, the agency noted.

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