Citing Falling Ad Revenue, Moody's Downgrades New York Times Co. Again

By: Mark Fitzgerald Moody's Investors Service downgraded its credit ratings for The New York Times Co. Friday, saying worsening ad revenue results would increase the debt burden of the publishing company.

In January, Moody's became the last of the major credit ratings firms to take an investment-grade rating from Times Co. debt. In its latest action, Moody's downgraded the Times Co.'s Corporate Family Rating and Probability of Default ratings one notch to B1 from Ba3. Moody's also said the rating outlook is negative, suggesting a further downgrade is possible.

Under Moody's definition, a B1 rating suggests "very speculative" bonds or notes. About $370 million of debt is covered by the rating action.

Moody's said the "severity adnd duration of ongoing deterioration in newspaper advertising" would pressure the Times Co.'s revenue and cash flow - increasing the ratio of debt to EBITDA (earnings before interest, taxes, depreciation and amortization).

More details of the Moody's rating action are at E&P's business-oriented Fitz & Jen blog.