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S&P downgrades Daily Mail
S&P said it lowered Daily Mail & General Trust plc's issue ratings to BB from BB+ and removed the ratings from CreditWatch negative.
The downgrades follow news that Daily Mail has distributed its stake in Euromoney to certain holders of A shares, together with a £200 million cash distribution from existing cash reserves, the agency said.
Additionally, the group has set aside £117 million in cash to fund the group's pension schemes, with the final funding requirement pending the outcome of an upcoming triennial actuarial plan review, the agency noted.
S&P said it believes the transaction weakens Daily Mail's capital structure strength and flexibility through the distribution of cash and equity value to shareholders.
The agency said it expects the pro forma reduction in dividends payable to Daily Mail shareholders will be greater than £29 million. This is larger than the loss of the Euromoney dividend receipts, which was estimated at about £18 million in the 2019 forecast, S&P said.
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