Moody's Cuts Tribune's Rating (Even) Further

By: Moody's Investors Service downgraded Tribune Co.'s credit ratings deeper into "junk" status, saying it expects the newspaper publisher's advertising revenue in 2008 and 2009 to be lower than previously expected.

The agency also said if Tribune's planned $8.2 billion sale to investor Sam Zell goes through as planned, it would drop the rating further.

Moody's cut Tribune's ratings one notch to "B1" from "Ba3," leaving it three notches below investment-grade. Ratings measure a company's ability to repay debt and influence its cost of borrowing new funds.

Tribune owns the Los Angeles Times, the Chicago Tribune, nine other dailies and 23 television stations.

Moody's said a completion of the sale to Zell, which could come as soon as Friday, would result in another downgrade, to "B3," because of the increased debt the company would take on as part of the deal's financing. That rating is lower than the "B2" rating Moody's had previously anticipated for Tribune once it was sold.