Moody’s cuts Johnston Press, notes to Caa3

Moody's Investors Service said it downgraded Johnston Press plc’s corporate family rating to Caa3 from Caa2, probability of default rating to Caa3-PD from Caa2-PD and the rating on the £220 million outstanding senior secured notes due 2019 issued by subsidiary Johnston Press Bond plc to Caa3 from Caa2.

The outlook is negative.

"The ratings downgrade reflects the increased probability of a debt restructuring happening in the coming 12 months following the company's appointment of advisors to review the financing options for the bond maturing in 2019," Christian Azzi, Moody's assistant vice president, analyst and lead analyst for Johnston Press, said in a news release.

The action follows the company's recent announcement that it mandated Rothschild & Co. and Ashurst LLP as advisors to a "strategic review of financing options" in relation to the £220 million senior secured notes, which come due on June 1, 2019.

While the company has not explicitly presented the various options being considered as part of this strategic review, Moody’s said the downgrade of the probability of default rating to Caa3-PD reflects the heightened risk that Johnston Press might engage in a restructuring of its current capital structure, which would lead to a default under Moody's definition.

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