New York Times Co. (NYT)’s outlook for its corporate debt rating was reduced to “stable” from “positive” by Moody’s Investors Service, citing falling print sales and the company’s slow progress in reducing debt.
Times Co. may take several years to use its cash to cut debt to a level sufficient for an upgrade, Moody’s said today in a statement. Moody’s maintained Times Co.’s corporate rating at B1, or four levels below investment grade.
The publisher of the third-biggest U.S. newspaper by weekday circulation has been shedding ancillary businesses to pay down debt and focus on its flagship product. Times Co. agreed to sell its About.com unit to IAC/InterActiveCorp (IACI) this week for $300 million, adding to its cash reserves of $570.2 million.
“NY Times may be comfortable holding a sizable cash position until economic uncertainty diminishes as a primary objective of the board is to preserve liquidity and the viability of the company’s news and information industry leadership,” Moody’s said.
The publisher may introduce a “modest” recurring dividend next year and may distribute cash to shareholders by other methods, the ratings company said. The New York Times trails the Wall Street Journal and USA Today in weekday circulation.
Times Co. rose less than 1 percent to $9.18 at the close in New York. The shares have gained 19 percent this year.
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