Posted on 04/24/2006 1:21:57 PM PDT by Grampa Dave
S&P plans to rate McClatchy's assumed debt "BBB" Mon Apr 24, 2006 1:15 PM ET
NEW YORK, April 24 (Reuters) - A rating on the senior unsecured debt assumed by McClatchy Co. through the acquisition of Knight Ridder Inc. will be lowered by Standard and Poor's following the close of the buyout, the rating agency said on Monday.
S&P said it will rate the senior unsecured debt "BBB," the second-lowest investment grade rating.
"This announcement follows a clarification to the terms of McClatchy's planned $3.75 billion senior credit facilities, which will be used to help fund the acquisition of Knight Ridder for about $6.5 billion," S&P said in a statement.
S&P said initially there was concern that if the credit facilities were rated lower than "BBB-minus" by S&P or "Baa3" by Moody's Investors Service, the facilities would be guaranteed by McClatchy's subsidiaries. However, S&P said it has since been clarified that the guarantee provision will not be triggered because of the investment-grade rating by S&P.
The "BBB" rating on the debt assumed by McClatchy from Knight Ridder will be rated at the same level as the new credit facilities, S&P said.
McClatchy's current "BBB-plus" long-term corporate credit ratings may still be lowered, S&P said. Earlier this month the rating agency determined McClatchy's corporate credit rating will be lowered one notch at the close of the Knight Ridder acquisition because of the increase of debt. Also, ratings on Knight Ridder will be withdrawn, S&P said.
Regardless of the spin KRI's senior unsecured debt will be lowered to BBB.
Finally as the spin is close to the end: "McClatchy's current "BBB-plus" long-term corporate credit ratings may still be lowered, S&P said."
We need an Enron and Arthur Andersen decoder ring to decode these articles.
Oh, boy!! I wanna invest my money in that company!!
Psst.
Wanna buy some really cheap McClatchy stock?
Heheh......cute.
No Rolex watches up my sleeve, but I have some MNI stock at 40% less than it was a year ago.
I am waiting until the rating is XXX.
No problem. I still trust you.
If it gets to an XXX rating, we can have a special fund raiser on Free Republic to buy it.
Then we can fire everyone and give the main office building to Jim Robinson for the new headquarters of Free Republic.
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