S&P cuts Morris Publishing

Standard & Poor's said it lowered the corporate credit rating on Morris Publishing Group LLC to B from BB-, its secured debt to BB- from B+ and subordinated debt to CCC+ from B. The ratings were removed from CreditWatch, where they were placed with negative implications on Feb. 7.

The outlook is negative.

According to S&P, the downgrade reflects significant declines in revenue and EBITDA in Morris's newspaper business segment and the likelihood for further declines as well as possible violation of the bank facility's covenants, with leverage tightening to 5.5 times on Dec. 31, 2008.

The B rating reflects Morris' limited liquidity position, the agency said, as well as significant consolidated debt levels, moderate-size cash flow base and a concentration of revenue and cash flow at its largest newspaper.

These factors are somewhat tempered by geographically diverse newspaper market positions, S&P said.

The issuer's debt-to-EBITDA ratio is about 6 times.

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