Moody’s today (April 20) cut both Knight Ridder and McClatchy’s bond ratings to junk status, according to Reuters. It was the second time in a month that the bond rating service cut McClatchy’s ratings. At that time, McClatchy Treasurer Elaine Lintecum was quoted in the McClatchy-owned Sacramento Bee as saying McClatchy didn’t expect any more downgrades. “She said she believes Moody’s will change its mind about further downgrades ‘once they see that we can execute … on the deal,'” the March 29 Bee article stated. Since then, McClatchy hasn’t been able to sell the 12 Knight Ridder papers it was planning to spin off to lower its cost of borrowing money to buy the KR chain. On Saturday, the Mercury News reported such a deal was close, and on Sunday, Reuters said about the same thing. This morning, the L.A. Times also said McClatchy and Singleton are close to a deal. Meanwhile, other potential bidders, such as billionaire Ron Burkle who is financing a union buyout, want to bid, but haven’t received much cooperation from McClatchy.
KR, McClatchy bonds downgraded to junk
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