National Enquirer Owner Invites Default Talk: Corporate Finance

Just two years after emerging from bankruptcy, the publisher of the National Enquirer is being abandoned in the bond market on concern that competition from TMZ.com and Gawker.com will push it back into default.

American Media Inc.’s $470 million face value of bonds have lost 3 percent of their value this month, the worst performance among distressed issuers, even as the average bond yielding more than 10 percentage points above similarly dated Treasuries gained 4.6 percent, according to Bank of America Merrill Lynch index data. Standard & Poor’s downgraded the Boca Raton, Florida-based company one level to B- with a negative outlook last week as cost cuts and higher prices haven’t compensated for lower sales.