S&P lowers American Media

Standard & Poor’s said it lowered the corporate credit rating on American Media Inc. to SD (selective default) from CCC+.

S&P also said it lowered the rating on the second-lien notes due 2018 to D from CCC-. The 3 recovery rating and CCC+ rating on American Media’s 11˝% first-lien notes due 2017 are unchanged.

The downgrade follows the exchange of about $7.8 million of the company’s 13˝% second-lien senior secured notes due 2018 and about $113.3 million of the company’s 10% second-lien senior secured payment-in-kind notes due 2018 for equity.

S&P said it believes the exchange is tantamount to default because the company did not meet the original terms of the second-lien notes obligation.

The holders of the second-lien notes, Chatham Asset Management LLC and Omega Charitable Partnership LP, already owned 100% of the outstanding equity following their acquisition of all of the issued and outstanding shares of common stock of American Media on Aug. 15, the agency said.

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