S&P puts MediaNews on negative watch

Standard & Poor's said it placed MediaNews Group Inc.'s BB corporate credit and B+ subordinated debt ratings on CreditWatch with negative implications to reflect the potential for a weakening in the company's credit profile following the announcement it has signed a definitive merger agreement, in combination with The Hearst Corp., to acquire four newspapers from The McClatchy Co. for about $1 billion in cash.

However, concurrent with the transaction, Gannett and Stephens Media, MediaNews' 45.8% partners in its California Newspapers Partnership, have committed to fund a portion of the purchase price of the San Jose and Contra Costa papers, which will then be contributed to California Newspapers. The acquisition, which is subject to regulatory approval, is expected to be completed in the summer.

In resolving its CreditWatch listing, S&P said it will evaluate MediaNews' financial strategies and objectives, including future acquisitions, and how the pursuit of these strategies will be balanced against debt reduction expectations.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.