S&P downgrades Time

S&P said it lowered the corporate credit rating on Time Inc. to BB- from BB.

The agency also said it lowered the rating on the company's senior secured credit facility to BB+ from BBB-.

The recovery rating on this debt remains at 1, indicating 90% to 100% expected default recovery.

S&P also said it lowered the rating on its senior unsecured notes to BB- from BB.

The recovery rating on this debt remains at 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The downgrades reflect a more cautious view of Time's ability to deleverage and its business transformation given a belief that secular pressures the magazine industry faces will intensify as consumer preferences shift to digital media from print media, the agency said.

The downgrades also consider the company’s cash flow volatility and an expectation that adjusted leverage will decline to just within the 2x to 3x rating threshold range over the next two years, S&P said.

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