S&P cuts Haights

Standard & Poor's said it lowered its corporate credit rating on Haights Cross Communications Inc. to CCC+ from B-, and the senior unsecured rating to CCC- from CCC.

S&P said it also lowered its senior unsecured rating for Haights Cross Operating Co. to CCC- from CCC.

At the same time, S&P said it assigned a recovery rating of 1 and affirmed its B bank loan rating on Haights Cross Operating's outstanding $30 million revolving credit facility due 2008, which is rated two notches above the corporate credit rating.

Also, S&P said it assigned a recovery rating of 1 and affirmed its B- secured loan rating on Haights Cross Operating Co.'s outstanding $126.5 million second-priority senior secured term loan due 2008, which is rated one notch above the corporate credit rating.

The outlook is negative.

The downgrade reflects S&P's expectations of lower EBITDA in the fourth quarter, its concerns about earnings prospects for the company's supplemental publishing unit specifically, rising debt leverage with very high interest costs and the shortening window before refinancing requirements in 2008.

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