The New York Times Co.’s efforts to complete the sale of its Midtown headquarters took on greater urgency yesterday after Moody’s Investors Service joined Standard & Poor’s in downgrading the troubled newspaper company’s debt to “junk” status.
Moody’s move is expected to sharply impact the Times Co.’s ability to raise debt, as companies with junk ratings often find it prohibitively expensive to borrow capital through traditional channels.
The rating agency cut the Times Co.’s rating to Ba3 from Baa3, saying that crumbling advertising revenue will continue to put “significant downward pressure” on the company’s cash flow.
Moody’s move follows S&P’s decision in October to slash the Times Co.’s debt rating to junk, based on similar concerns.
The bad news comes as the Times Co. scrambles to come up with enough cash to help it pay down more than $1 billion in debt, including a $400 million payment due in May.
Earlier this week, the Times Co. reached a deal under which Mexican billionaire Carlos Slim will lend the beleaguered company $250 million at an astonishing 14 percent interest rate.
The company is also in the process of selling 19 floors in its brand-new, Renzo Piano-designed Eighth Avenue headquarters to investment-management firm W.P. Carey & Co. for as much as $225 million.