S&P Lowers Washington Post Corporate Credit Rating

Standard & Poor's Ratings Services on Friday lowered its corporate credit and senior unsecured issue-level ratings on Washington Post Co. to A from A+.

Analysts affirmed the A-1 commercial paper rating on the company and removed the ratings from CreditWatch, where they were placed with negative implications on May 1.

The rating outlook is negative, reflecting a high level of revenue variability and significant risks for the company in restructuring its newspaper and magazine publishing businesses, S&P Ratings analysts said.

Shares rose $1.19 to close at $347.91. They've traded between $300.16 and $666.77 in the past 52 weeks.

In aftermarket trading shares, rose $1.52.

Credit analyst Emile Courtney said the downgrade reflects the expectation that losses in earnings before interest, taxes, depreciation and amortization — known as EBITDA — will significantly reduce the company's total earnings generation this year, partially offsetting positive contributions from its education and cable businesses.

He also expects a meaningful decline this year in EBITDA results in the television broadcasting business as a result of the recession and pressure on local television advertising spending.

He said total EBITDA this year is likely to decline by about 30 percent, a significantly higher rate of decline than previously expected.

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