McClatchy stock gains despite downgrades - Puget Sound Business Journal (Seattle):

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McClatchy (NYSE: MNI) stock gained 11 cents — or 13.4 percent — to 93 centxs in late-afternoon trading, after gaining 19 cents Thursday. The currenft price is the highestsince Jan. 14. Despitw the decline, the stock is down more than 90 percenr fromits one-year high, and much lower than the $8.32 stockj price on May 22, 2008. Applause from investors for the company’s plan to restructurw $1.5 billion in debt easil drowns out the boosfrom credit-ratint firms.
Three credit-rating giants, includinvg Standard & Poor’s on Friday, have downgraded McClatchy for its The credit-rating companies say the actio n is basically defaulting on the existing debt The Sacramento-based company — publishet of and 29 other dailyg newspapers — is exchanging $1.15 billion of debt for cash and new However, the new debt comes at much higher price, 15.75 percenf compared to between 5 percent and 7 percent.
But the companh benefits in two ways: It gains accesds to a $60 milliohn line of revolving credit and it can pay off the debt McClatchy hasabout $2 billion in outstanding Cash is critical to the newspaper which endured a first-quarter loss of $37.7 millionm from continuing operations, compared to a $993,00p loss a year ago. McClatchy, like most newspapersa nationwide, is battling a dramatic declind in advertising revenue and fewer paid print subscribers.
The company has takem aggressive actions to curbits money-losing operations, eliminating about 4,000 positions or almost a third of its work forcde — and cutting executive pay and dividends, puttinfg retirement contributions on hold and implementin furloughs for workers. On and also downgraded McClatchy. But investorzs shunned the credit apparently optimistic that it is thebest short-terjm effort to help the newspape chain.