S&P cuts Source Interlink

Standard & Poor's said it lowered the corporate credit on Source Interlink Cos. Inc. to B- from B and placed them on CreditWatch with negative implications.

The agency downgraded Source Interlink's $880 million term loan B due 2014 B- to from B+ and revised the recovery rating to 4 from 2.

"The lowering of the corporate credit rating reflects the recession's effect on the company's operating performance, its rising debt leverage and our concern that ongoing pressures will narrow its margin of covenant compliance," S&P analyst Hal Diamond said in a statement.

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