S&P lowers MediaNews

Standard & Poor's said it lowered MediaNews Group Inc.'s corporate credit rating to B- from B. Ratings remain on CreditWatch with negative implications, where they were placed Feb. 28.

S&P said the downgrade reflects worsening trends in cash flow generation at MediaNews and the agency's belief that at the current rate of cash flow decline, risks are heightened that MediaNews may violate its total leverage covenant in its credit facility over the near term.

Total leverage was 6.53 times at December, compared with the company's 6.75 times total leverage covenant at December, which steps down to 6.5 times on June 30 and to 6.25 times on Sept. 30. There is also limited cushion in the company's 4.25 times senior leverage and 1.25 times fixed-charge coverage covenants.

The agency said that MediaNews' liquidity could benefit from a history of good relationships and track record of significant asset deals with partners of solid credit quality.

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