Fitch downgrades Tribune

Fitch Ratings said it downgraded Tribune Co.'s issuer default rating, senior unsecured revolving credit facility and senior unsecured notes to BB- from BB+ and subordinated exchangeable debentures due 2029 to B+ from BB.

The issuer default rating and B commercial paper rating remain on Rating Watch Negative.

The downgrade follows the company's announcement that its board of directors has approved a plan that would result in the company going private and Tribune shareholders receiving $34.00 per share. The company would be majority owned by a newly created Employee Stock Ownership Plan. Tribune expects to sell the Cubs and its Comcast SportsNet interests to help fund the transaction.

The agency said the downgrade reflects the significant debt burden the announced transaction would place on the company's balance sheet as its revenue and cash flow have been declining. Fitch believes the proposed plan would be detrimental to bondholders as pro forma consolidated leverage could exceed 9x.

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