S&P boosts McClatchy

Standard & Poor's said it raised its corporate credit on McClatchy Co. to B from B-.

The upgrade reflects the significant current and expected moderation in the pace of ad revenue declines in 2010 and 2011 and improving debt leverage and discretionary cash flow, the agency said.

S&P noted that it also revised its recovery rating on the company's first-lien senior secured credit facilities and first-lien notes to 2 from 3 while also raising its issue-level rating on this debt to B+, one notch higher than its B corporate credit rating on the company, from B-, in accordance with its notching criteria for a 2 recovery rating.

The first-lien senior secured recovery rating revision reflects the expected early repayment of all term debt by year-end 2010, which improves recovery prospects for secured lenders in its simulated default scenario, the agency noted.

In addition, the agency said it raised its issue-level ratings on the company's unsecured debt originally issued by Knight Ridder Inc. to CCC+ from CCC.

"The B corporate credit rating on McClatchy reflects its expectation of further moderation in ad revenue declines in the fourth quarter of 2010 and a recovery in full year 2010 EBITDA," said S&P credit analyst Hal F. Diamond.

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