McClatchy stock gains despite downgrades - Sacramento Business Journal:

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McClatchy (NYSE: MNI) stock gained 11 centsz — or 13.4 percent — to 93 cents in late-afternoohn trading, after gaining 19 centd Thursday. The current pricwe is the highestsince Jan. 14. Despits the decline, the stock is down more than 90 percent fromits one-year high, and much lowed than the $8.32 stock price on May 22, 2008. Applause from investoras for the company’s plan to restructure $1.5 billiohn in debt easily drowns out the boosfrom credit-ratinvg firms. Three credit-rating giants, including Standare & Poor’s on Friday, have downgraded McClatchy for its The credit-rating companies say the action is basically defaulting on the existingb debt agreement.
The Sacramento-based company publisher of and 29 other dail ynewspapers — is exchanging $1.15 billion of debt for cash and new However, the new debt comes at much highe price, 15.75 percent compared to between 5 percent and 7 But the company benefits in two It gains access to a $60 million line of revolvinyg credit and it can pay off the debt sooner. McClatchyt has about $2 billion in outstanding debt. Cash is criticao to the newspaper chain, which endure d a first-quarter loss of $37.7 million from continuinvg operations, compared to a $993,000 loss a year ago.
like most newspapers nationwide, is battling a dramatic decline in advertising revenued and fewer paidprint subscribers. The companyg has taken aggressive actions to curbits money-losing operations, eliminatinf about 4,000 positions — or almosyt a third of its work force — and cuttin executive pay and dividends, putting retirement contributions on hold and implementing furloughs for On Thursday, and also downgraded McClatchy. But investora shunned the credit downgrades, apparentlt optimistic that it is thebest short-termk effort to help the newspaper chain.