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SYDNEY - Ratings agency Standard & Poors' (S&P) has cut the credit worthiness of print and online publisher Fairfax Media Ltd by one notch, ahead of its merger with Rural Press Ltd.
S&P cut the long term rating to BBB-minus, from BBB, and assigned a stable outlook.
The rating action comes after Fairfax gained all necessary approvals to enable its merger with Rural Press to proceed.
"Rural Press adds some further diversity to Fairfax's operations, but the rating downgrade reflects the added debt burden that this merger brings to the group and management's demonstrated appetite for higher leverage than prescribed by its past financial policies," S&P credit analyst Peter Sikora said.
The merger is due to be settled on May 8.
The rating on Fairfax's stapled preference securities was also lowered, to BB, from BB-plus.
- AAP
