What Explains Gannett's Credit Downgrade?

By: E&P Staff Credit raters like companies that do not take on overwhelming debt, that grow with responsible and strategic acquisitions, and have a track record of paying down debt even in bad economic conditions.

Companies, in other words, like Gannett Co. Inc.

Yet, Moody's has downgraded Gannett's senior unsecured debt and issuer rating to Baa2, its minimum investment grade, from A3 -- and changed its outlook to "negative," indicating a further downgrade is possible.

What explains Moody's action? E&P's business-oriented blog, Fitz & Jen blog, analyzes the credit report, and finds some arguments that make Gannett's debt situation look quite good -- especially compared to its peers in the newspaper business.