Moody's lowered McClatchy's corporate family rating to "Caa2" from "Caa1" and upgraded its possibility of default rating upon the company's completion of the exchange offer, which would exchange the existing senior unsecured notes for new 15.75 percent senior unsecured guaranteed notes due July 2014.
Moody's said the offer constitutes a distressed exchange and a default. S&P also expressed concern about the exchange at a discount to par value, saying it is tantamount to a default and lowered its corporate credit rating to "SD" from "CC".
Odd: the report says the downgrade by Moody's and S&P happened Friday, but I couldn't find any published reports on it until late Monday.
Hat tip: comments
Update: More info at Fitz and Jen here.
Update #2: As promised, S&P raised its corporate rating on McClatchy to "CC" from "SD" -- which is an improvement but still deep in junk territory.