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S&P cuts WRC Media facility to B, other ratings
Standard & Poor's said it lowered its ratings on WRC Media Inc., including its corporate credit rating and bank credit facility to B from B+ as well as the subordinated debt to CCC+ from B-.
The ratings remain on CreditWatch with negative implications.
S&P said the downgrade reflects the company's high debt leverage, a weak near-term earnings outlook in supplemental education, and strained liquidity, which the company is endeavoring to address.
The debt to EBITDA ratio was 5.41x as of Sept. 30, while the debt to EBITDA covenant steps down to 5.00x from 5.50x on Dec. 31. The company expects that it will not be in compliance with its debt leverage covenant as of Dec. 31.
S&P said WRC Media has been evaluating alternatives for resolving its liquidity issues, though no definitive plan has been reached.
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