S&P No Longer Rating Journal Register's Tumbled Credit

By: Mark Fitzgerald Standard & Poor's Ratings Services, which last week downgraded Journal Register Co.'s corporate credit at its lowest rating possible, said Friday it withdrew its ratings on the troubled publisher of the New Haven (Conn.) Register and 21 other papers.

"We lowered the ratings on July 25, 2008, after the company announced that it had entered into a forbearance agreement with lenders, which included a provision whereby interest under the credit agreement will accrue and will not be paid for the period July 24, 2008 through Oct. 31, 2008," S&P said in a statement. "We viewed this event as a meaningful departure from the original terms of the credit agreement, resulting in a 'D' corporate credit and issue-level ratings under our criteria."

A D rating indicates a company is in default of its loans.

An S&P spokesperson said the ratings were withdrawn at the request of Journal Register, which has deregistered its securities with the Securities and Exchange Commission and its bonds are not traded publicly. The company almost never responds to media requests for comments, and Friday morning Gary Struening, its vice president/finance, did not immediately return a phone message from E&P.

Journal Register has been reeling under a debt burden of about $650 million, the great majority of it borrowed to buy a cluster of dailies in suburban Detroit and a new production plant for them. Michigan soon after slipped into an economic slump that has weakened the newspapers for several years.

Under the forbearance agreement with its lenders, led by JPMorgan Chase Bank, N.A., Journal Register Journal Register appointed Robert Conway of Conway, Del Genio, Gries & Co. LLC to the newly created position of Chief Restructuring Officer.

Earlier this year, Journal Register was delisted from the New York Stock Exchange because its stock price was consistently below $1.05 a share. It is still traded on the Over-The-Counter Pink Sheets.

In early trading Friday, Journal Register (PINK SHEETS: JRCO.PK) shares were trading at 2 cents, down a penny from the opening.