Fitch Puts Knight Ridder Debt on Rating Watch Negative

Posted Monday, November 14, 2005 12:00 am

By: E&P Staff With Knight Ridder exploring strategic options that include a sale, Fitch Ratings warned Monday that it might downgrade its debt rating.

Fitch said it placed Knight Ridder senior unsecured debt and its commercial paper on Rating Watch Negative. The senior unsecured debt is now rated "BBB," the second-lowest investment-grade debt.

The ratings firm noted that Knight Ridder announced Monday that it had hired Goldman Sachs to explore strategic alternatives including an outright sale.

"The increased pressure from several of the company's significant stakeholders to increase shareholder returns has pressured the company to take this action and Fitch believes there is minimal capacity within the current ratings for meaningful additional shareholder initiatives," Fitch said in a statement.

Fitch noted the newspaper industry in general is "facing significant shareholder pressure due to historically low stock prices and slower growth prospects."

"By modifying its financial policies earlier this year, Fitch believes Knight-Ridder has clearly demonstrated its appetite to increase shareholder-friendly initiatives," Fitch said.

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Fitch Puts Knight Ridder Debt on Rating Watch Negative

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