S&P: Cambium to negative

Standard & Poor's said it affirmed its B- corporate credit rating on Cambium Learning Group Inc., but revised the outlook to negative from stable.

The outlook change reflects weak first-quarter operating performance, rising debt leverage and considerable doubt as to whether Cambium can stabilize its operating performance, S&P noted.

The agency added that it sees a risk that strained government budgets will continue to negatively affect Cambium's profitability and debt leverage.

"At the same time, the agency revised its recovery rating on the company's senior secured notes to 5, indicating its expectation of modest (10%-30%) recovery in the event of a payment default, from 4 (30%-50% recovery expectation)," said S&P credit analyst Hal Diamond.

As a result, the agency said it lowered its issue-level rating on this debt to CCC+ from B-, in accordance with its notching criteria for a recovery rating of 5.

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