S&P: Source Interlink view negative

Standard & Poor's said it revised the outlook on Source Interlink Cos. Inc. to negative from stable and affirmed the B corporate credit rating.

The agency also assigned a CCC+ rating with 6 recovery rating to Source Interlink's $465 million senior notes due 2018.

Proceeds are expected to be used to refinance the company's outstanding $465 million bridge credit loan facility.

The outlook revision reflects concern that the economic slowdown will continue to affect the company's magazine publishing business, S&P said.

Ratings also consider the financial risk from the 2007 $1.2 billion debt-financed acquisition of Primedia Inc.'s division and the challenges of managing an aggressive pace of acquisitions, the agency noted.

For the 12 months ended April 30, the issuer's debt-to-EBITDA ratio was high at 7.2 times.

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