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NEW YORK (AFX) - Moody's Investors Service downgraded children's book publisher Scholastic Corp.'s credit ratings on Tuesday, citing concern over low operating margins and revenue growth.
Moody's downgraded Scholastic's senior unsecured rating to "Ba1" a "junk" or speculative, substantial risk designation, from "Baa3." Moody's assigned a "Ba1" corporate family rating, with a stable outlook, to the New York publisher. The ratings changes affect $470 million in debt securities.
Moody's said it's concerned about moderate growth in the mature children's book publishing market, as well as Scholastic's lack of a clear-cut successor to the wildly successful Harry Potter book series, which is ending soon. The credit-rating agency said Scholastic's cost-cutting program also carries risks of hurting the breadth of the company's product line and service quality.
Scholastic shares fell 20 cents to close at $25.77 on the Nasdaq. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.
