S&P gives B to Johnston Press notes

Standard & Poor's said it assigned its B long-term corporate credit rating to Johnston Press plc.

The outlook is negative.

At the same time, the agency assigned its B issue rating to the £225 million senior secured notes due 2019, issued by Johnston Press Bond plc, a subsidiary of Johnston Press plc. The recovery rating on these loans is 4.

S&P said the rating reflects its view of the company's "highly leveraged" financial risk profile and "vulnerable" business risk profile as our criteria define these terms.

The "vulnerable" business risk profile reflects the agency’s view of the longer-term structural decline in the newspaper industry related to migration of readership and advertising to online sources. The company's operations in the declining newspaper business, dependence on volatile print advertising revenues, and concentration of operations in the U.K. constrain Johnston Press' business risk profile.

The assessment of the financial risk profile as "highly leveraged" reflects S&P’s view that, under the new capital structure, Johnston Press' debt-to-EBITDA ratio (adjusted for operating leases and postretirement benefit obligations) will remain above 5x, which characterizes a "highly leveraged" financial risk profile, based on the criteria.

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