Postmedia's capital structure unsustainable: S&P

Standard & Poor’s has downgraded Postmedia Network Inc.’s credit rating to the same grade assigned to ailing Greece, warning that the newspaper company could struggle to refinance its high-interest debt and calling its capital structure “unsustainable.”
In explaining the downgrade, the ratings agency said Canada’s largest newspaper chain, a subsidiary of Postmedia Network Canada Corp., should have enough cash to cover at least the next year, “which mitigates the likelihood of a near-term payment crisis.”
But by downgrading the rating one notch to triple-C-plus from single-B-minus, S&P is signalling that Postmedia is vulnerable to the forces that have battered its revenue, particularly from print advertising, and sounding an alarm over its chances of reaching better terms on more than $670-million in debt. Absent an improvement on revenue and a turnaround on earnings, the company’s ability to meet its obligations could be in peril.
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