S&P downgrades Source Interlink to D

Standard & Poor's said it lowered its corporate credit rating and all issue-level ratings on Source Interlink Cos. Inc. to D. The corporate credit rating was lowered from CCC.

The downgrade follows the company's announcement of its Chapter 11 filing and related prearranged restructuring. The plan of reorganization also calls for debtor-in-possession financing from pre-petition lenders, consisting of a $300 million revolver and $85 million term loan.

The agency said the recession and secular trends affecting the magazine publishing industry have hurt the company's operating performance and automotive non-original equipment manufacturers, which have suffered from the sharp decline in U.S. auto sales, account for the majority of advertising revenues.

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