Moody's Downgrades Tribune, Again

By: E&P Staff Moody's Investors Service knocked down its rating on Tribune Co.'s Corporate Family and Probability of Default rating from B1 to B3, the second time since November 29.

Analysts lowered its rating on concerns of the high leverage associated with the $8.7 billion transaction led by Sam Zell expected to close this year.

According to a statement from Moody's, "The increase is leverage is occurring at a time of pressure on Tribune's advertising revenue and operating margins from online and cross media competition and a cyclical downturn in the residential real estate market."

Moody's assigned a B2 rating to the $2.1 billion guaranteed senior secured incremental term loan and B and a Caa2 rating to the $1.6 billion guaranteed bridge facility. The rating outlook is "stable."