S&P Downgrades Haights Cross

-- Publishers Weekly, 6/17/2008 7:52:00 AM

Standard & Poor’s has lowered its corporate credit rating on Haights Cross, citing concerns that the supplemental publisher may not be able to repay its $124.5 million senior loan due August 15. Although Haights has been actively looking to sell at least part of the company, S&P said “we are concerned that current unfavorable credit market conditions will persist and may undermine the company’s efforts.” The company’s liquidity is further complicated, S&P said, “by downward pressure on industry asset sale multiples, which might require asset sales at less than desired prices.” Among the assets for sale is the audio publisher Recorded Books. Industry members had expected the sale of the company to move rapidly (possibly to Amazon), and have been puzzled by the length of time in getting a deal done. For the first quarter, Recorded Books managed to increase sales by 3%, to $21.3 million, in a tough market.