S&P drops Tribune

Standard & Poor's said it lowered its ratings on Tribune Co., including the corporate credit rating, which was lowered to B+ from BB-.

The agency noted that the ratings will remain on CreditWatch with negative implications until the close of the company's LBO valued at slightly less than $14.5 billion, including the assumption and repayment of $5.7 billion of debt.

Based on its analysis of Tribune's expected operating performance and cash flow generation and the proposed capital structure, the agency said it has determined that at the close of the LBO transaction, it will lower the corporate credit rating to B with a negative outlook.

This incorporates an estimated $290 million in proceeds to be received from the settlement of the Matthew Bender tax case and cash available of $262 million at July 1, in addition to expected debt reduction from planned asset sale proceeds, including the sale of the Chicago Cubs and the company's 25% interest in Comcast SportsNet Chicago, the agency added.

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