Momnesia

What's Next for The Augusta Chronicle?

AUGUSTA, GA. - By Mark Fitzgerald for Editor & Publisher, Published: Feb. 3

Morris Publishing Group, already looking at a bankruptcy option, said its lenders are giving it more time to avoid defaulting on its loan agreement after it missed a $9.7 million interest payment that was due last Sunday.

Under the agreement, Morris, publisher of The Florida Times-Union in Jacksonville and The Augusta (Ga.) Chronicle, has until March 3 to avoid defaulting on the $278 million of senior subordinated notes due 2013.

However, the group of lenders, including JPMorgan Chase & Co., reduced the amount of money Morris can tap from its revolving credit facility to $70 million from $100 million. In a filing with the U.S. Securities and Exchange Commission (SEC), Morris said accessing any amount above $60 million requires the consent of a majority of lenders.

The new agreement also increases the interest rate on borrowing by a half a percentage point.

Standard & Poor's Ratings Services reacted to the filing by downgrading Morris' credit rating on Morris to D, its lowest rating and one indicating default, from CCC. S&P said skipping the interest payment puts it in default.

Morris has said it hired Lazard Freres & Co. as financial advisors to "restructure" the company. Lazard is advisor to Tribune Co., which last month filed for Chapter 11 bankruptcy protection. Morris also announced the hiring of a law firm with a strong bankruptcy practice.

More details of the amended credit agreement are at E&P's business-oriented blog Fitz & Jen blog.