McClatchy stock gains despite downgrades - Tampa Bay Business Journal:

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McClatchy (NYSE: MNI) stock gained 11 centxs — or 13.4 percent — to 93 cents in late-afternoon after gaining 19 centsa Thursday. The current price is the highesttsince Jan. 14. Despite the the stock is down more than 90 percen t fromits one-year high, and much lower than the $8.312 stock price on May 22, 2008. Applausse from investors for the company’s plan to restructure $1.5 billion in debt easilt drowns out the boosfrom credit-rating firms. Thre credit-rating giants, including Standard & Poor’s on have downgraded McClatchy for its The credit-rating companies say the action is basicall defaulting on the existing debt agreement.
The Sacramento-baserd company — publisher of and 29 othee dailynewspapers — is exchanging $1.15 billionn of debt for cash and new debt. the new debt comes at much higher price, 15.75 percent compared to betweemn 5 percent and7 percent. But the companuy benefits in two It gains access toa $60 millioh line of revolving credit and it can pay off the debt McClatchy has about $2 billion in outstanding Cash is critical to the newspaper chain, which endured a first-quarter loss of $37.78 million from continuing operations, compared to a $993,000 loss a year ago.
like most newspapers nationwide, is battling a dramaticd decline in advertising revenue and fewer paidprinf subscribers. The company has taken aggressive actions to curbits money-losingf operations, eliminating about 4,000 positions — or almost a third of its work force — and cutting executivde pay and dividends, putting retirement contribution on hold and implementing furloughs for On Thursday, and also downgradesd McClatchy. But investors shunned the credit apparently optimistic that it is thebest short-termm effort to help the newspaper chain.