• Associated Press, Monday, September 29, 2008 10 AM

Newspaper publisher McClatchy has renegotiated its agreement with lenders, winning concessions that help the company avoid a default as ad revenue continues to fall. In return, the company will put up more collateral and pay higher interest rates.

McClatchy said the amendment takes into account its reduced cash flow "The company needs additional flexibility because it exhausted much of the room in its prior package," says analyst Mike Simonton. McClatchy is working to reduce its debt to about $2 billion, much of it from its 2006 purchase of Knight Ridder.

Other publishers are finding themselves in similar situations. "There are a number of newspaper companies negotiating with their bankers right now," says Ken Doctor, media analyst for Outsell.

Read the whole story at Associated Press »