S&P places Media General on positive watch

Standard & Poor's said it placed its CCC+ corporate credit rating on Media General Inc., along with its CCC+ issue-level rating on the company's senior secured notes on CreditWatch with positive implications. The recovery rating on the notes remains 3.

The agency said the CreditWatch placement is based on Media General's agreement to sell the majority of its newspaper assets to BH Media Group. The CreditWatch also reflects the announcement that the company will refinance its existing bank debt due in March 2013.

"Although the sale of most of the company's newspapers improves Media General's business risk profile, we expect leverage will be considerably higher following the close of the transaction because of the low sale multiple, in our view, compared with the company's already-high leverage," said S&P credit analyst Jeanne Shoesmith in a news release.

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