No Ratings Downgrade for 'Pittsburgh Post-Gazette' Parent

By: Mark Fitzgerald Moody's Investors Service is keeping its Ba3 rating, a rating on the higher end of the "junk" scale, for Block Communications, publisher of the Pittsburgh Post-Gazette -- despite its newspaper holdings.

"Notwithstanding the negative impact of secular and cyclical pressure in its newspaper segment, Block's cable operations continue to perform well," wrote Moody's credit analyst Karen Berckmann. "This segment, combined with good liquidity, has enabled the company to manage through challenging economic conditions without material deterioration of its credit profile. However, an ongoing inability to improve the currently unprofitable newspaper segment over time could have negative ratings implications."

Still, Moody's said its rating outlook for Block is "stable," meaning a change in credit rating is unlikely over the medium term.

Moody's affirmed a Ba3 rating for Block's "corporate family rating" and its "probability of default." The rating means there are "speculative elements" in its debt offerings. The highest speculative-grade credit rating under Moody's definitions is Ba1.

The complete Moody's report on Block Communications is posted on E&P's business-oriented Fitz & Jen blog.


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