Tribune may be moving closer to default

Continued advertising losses may be pushing Tribune Co. closer to default on the billions in debt it assumed when the Chicago-based media giant went private, Bloomberg News reported. Debt and asset sales might not be enough to stave off Tribune defaulting on its loans by yearend, according to Standard & Poor's analyst Emile Courtney. “In the absence of additional asset sales, we think that it's a possibility as early as December,”' Courtney said. Courtney said that Tribune may fall short of the cash it needs to meet terms of the loans on its leveraged buyout. Earlier this month, Gimme Credit LLC labeled the debt situation “deteriorating,” and the firm recommends selling Tribune bonds. And without enough cash, some newspaper companies may end up being pushed into bankruptcy, said Mark Young, president of Massachusetts investment bank Grist Mill Advisors. “These companies built their portfolios using leverage and executing a strategy with an investment thesis that was clearly flawed,” he said. “Almost all of these are going to have to go through a restructuring or bankruptcy to come out the other side.”
http://www.chicagobusiness.com/cgi-bin/news.pl?id=29850