Gannett (GCI) reported grim numbers for October, and debt-laden newspaper chain McClatchy (MNI) took it hard. Shares of the Sacramento-based newspaper chain hit a 52-week low of $15.07, down well over 60% since the beginining of the year.
The market is concerned that MNI may have trouble making its debt service as it moves into 2008. The firm recently took at $1.37 billion goodwill write-down, and Moody’s said it may cut its debt rating on the company again.
According to Reuters: The publisher faces "ongoing pressure on the company’s cash flow from declining advertising revenue that contributed to a $1.5 billion write-down of newspaper assets in the third quarter, and the resulting challenge to reduce leverage to the ranges originally incorporated in the ‘Ba1′ rating," Moody’s said in a statement.
Douglas A. McIntyre