NEW YORK (AP) -- Moody's Investors Service said Friday it has assigned a noninvestment-grade "B1" rating to Newsday LLC's proposed $650 million loan, which is being issued to finance Cablevision Systems Corp.'s acquisition of the newspaper publisher.Last month, Cablevision agreed to buy the Long Island-based newspaper from Tribune Co. in a deal valued at $650 million. Tribune will retain a 3 percent stake in a joint venture that will include Newsday and related publishing assets.
Moody's said Newsday's credit risk is perceived to be very high. Newspaper publishers, including Newsday, have been under increasing pressure as advertising revenue drops due to the difficult economic environment and a shift of ad spending to the Internet.
Moody's noted that the strong demographics of Newsday's New York markets potentially mitigate some of these risks.
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