The latest hit to The McClatchy Co.'s credit rating will increase the Sacramento newspaper publisher's borrowing costs. Moody's Investors Service lowered McClatchy's credit rating a notch to Ba2 on Friday, saying it believes "revenue declines in 2008 will continue to pressure operating cash flow due to weakness in McClatchy's local operating regions."
The downgrade will raise the interest rate a quarter-point on approximately $1 billion in bank debt.
Already burdened by massive debt, the Moody's downgrade comes at a bad time for McClatchy. How bad is McClatchy's debt crisis? Just last month, McClatchy projected total debt by the end of 2008 to be a whopping $2 billion.
