Ratings agency confirms Fairfax credit rating

Fairfax Media Ltd's BBB minus credit rating has been affirmed by Standard&Poor's Ratings Services which thinks the company does not have scope to make large acquisitions and keep its rating.

"We assess Fairfax's current leverage at the high end of expectations for the BBB minus rating, and although the company is not currently considering any further large acquisitions, there is no tolerance within the rating for further heavily debt-funded acquisitions, particularly as advertising markets head into a more difficult period in the economic cycle," Standard&Poor's credit analyst Peter Sikora said.

The statement comes at a time when Independent News&Media Plc is considering selling its 39.1 percent stake in APN News&Media Ltd, owner of the New Zealand Herald newspaper. "The Fairfax rating will come under downward rating pressure if the company does not respond appropriately to emerging earnings pressure in 2009 or beyond," Mr Sikora said.