Teetering on the precipice: McClatchy narrowly averted default by renegotiating with creditors

Saturday I noted a Wall Street Journal report that indicated McClatchy was literally days away from potentially defaulting on debt payments before the company managed to renegotiate payment terms.

A reader points me to an AP story which confirms McClatchy came perilously close to default.

It's important for the company to get additional flexibility," said Mike Simonton, media analyst at Fitch Ratings, which analyzes corporate debt. "The company had exhausted much of the room it had under its prior covenant package."

Simonton said McClatchy might have come close to hitting a technical default if it hadn't renegotiated the terms by Sept. 30. Such a default ultimately could have forced the company to sell assets or declare bankruptcy.

It sure looks like McClatchy is in grave condition.