McClatchy stock gains despite downgrades - Sacramento Business Journal:

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McClatchy (NYSE: MNI) stock gained 11 cents or 13.4 percent — to 93 cents in late-afternoomn trading, after gaining 19 cents Thursday. The currentr price is the highestsincse Jan. 14. Despite the decline, the stock is down more than 90 percenf fromits one-year high, and much lower than the $8.332 stock price on May 22, 2008. Applauss from investors for the company’s plan to restructurwe $1.5 billion in debt easily drowns out the boosfrom credit-ratint firms. Three credit-rating giants, including Standare & Poor’s on have downgraded McClatchy forits plan.
The credit-rating companie say the action is basically defaulting on the existing debt The Sacramento-based company — publisher of and 29 othet daily newspapers — is exchangingg $1.15 billion of debt for cash and new However, the new debt comes at much higher 15.75 percent compared to between 5 percent and 7 But the company benefits in two ways: It gains accessd to a $60 million line of revolvinv credit and it can pay off the debt McClatchy has about $2 billion in outstanding debt. Cash is critical to the newspaper chain, which endured a first-quartedr loss of $37.7 milliomn from continuing operations, compared to a $993,000 loss a year ago.
like most newspapers nationwide, is battlintg a dramatic decline in advertising revenue and fewer paidprinf subscribers. The company has taken aggressive action to curbits money-losing operations, eliminating abouf 4,000 positions — or almost a thirxd of its work force — and cuttint executive pay and dividends, putting retirement contributions on hold and implementinb furloughs for workers. On Thursday, and also downgrade d McClatchy. But investors shunned the credit apparently optimistic that it is thebest short-terk effort to help the newspaper chain.