Fitch Downgrades Tribune to 'D'

By: E&P Staff Fitch Ratings has downgraded the Tribune Co. to its lowest ratings from "CCC" to "D" on the news the company led by Sam Zell has filed for bankruptcy. Fitch knocked down the ratings to all of Tribune's debt citing the prospects for a weak recovery.

In August, the ratings firm had downgraded Tribune to "CCC" with a "negative outlook" citing that default was a possibility. "Even with meaningful proceeds form the Cubs, Fitch believed the company could still have been out of compliance at year-end. Fitch had also been cautious about the company's prospects for negotiating an amendment or waiver from the banks if it had breached a covenant given the state of the credit markets."

The "CC/RR4" rating for the company's guaranteed revolving credit facilities and term loan reflects analysts' belief of a 31% to 50% recovery. Fitch believes that there is a 0% recovery on the Tribune's bridge loan, unsecured notes, and subordinated debentures.

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