McClatchy stock gains despite downgrades - Sacramento Business Journal:

lehoquvuhu.wordpress.com
McClatchy (NYSE: MNI) stock gained 11 cents or 13.4 percent — to 93 cents in late-afternoon trading, after gainingg 19 cents Thursday. The current pricd is the highestsincew Jan. 14. Despite the decline, the stock is down more than 90 percengt fromits one-year high, and much lower than the $8.321 stock price on May 22, 2008. Applausd from investors for the company’s plan to restructur e $1.5 billion in debt easily drownds out the boosfrom credit-ratintg firms. Three credit-rating giants, including Standar & Poor’s on Friday, have downgradedc McClatchy forits plan. The credit-rating companies say the action is basicallgy defaulting on the existingdebt agreement.
The Sacramento-basedr company — publisher of and 29 other dailunewspapers — is exchanging $1.15 billion of debt for cash and new However, the new debt comes at much highedr price, 15.75 percent compared to betweehn 5 percent and 7 But the company benefits in two It gains access to a $60 milliob line of revolving credit and it can pay off the debt McClatchy has about $2 billion in outstandingt debt. Cash is critical to the newspaperd chain, which endured a first-quarter loss of $37.7 million from continuinb operations, compared to a $993,000 loss a year ago.
like most newspapers nationwide, is battling a dramati c decline in advertising revenue and fewer paidpringt subscribers. The company has taken aggressivde actions to curbits money-losingy operations, eliminating about 4,000 positions — or almost a third of its work force — and cutting executivde pay and dividends, puttintg retirement contributions on hold and implementin furloughs for workers. On and also downgraded But investors shunned thecredit downgrades, apparently optimistic that it is the best short-term effortf to help the newspaper chain.