Dow Jones could pay more to refinance debt
EmptyNEW YORK -- Dow Jones & Co Inc chief executive Richard Zannino said Friday that a worsening credit market likely would force the company to pay more to refinance debt.
"We have a three-year term debt facility to roll over and with spreads widening, we'll likely pay more to refinance it," Zannino said in an e-mail interview with Reuters.
He was referring to a $225 million note maturing in February 2008, a spokesman confirmed, without providing further details.
Dow Jones, which publishes The Wall Street Journal and owns Dow Jones Newswires, is preparing to be sold to Rupert Murdoch's international media empire, News Corp., for more than $5 billion.
Zannino's comments were in response to questions posed about the state of deteriorating credit conditions that began in the U.S. subprime mortgage market.
On Friday, the Federal Reserve cut the discount rate, governing direct Fed loans to banks, in a surprise move to allay market concerns that credit woes could damage global economic growth.
"Market slides always worry me as they impact business confidence, which in turn impacts business investment in everything from hiring to advertising to capital to (mergers and acquisitions)," Zannino said.
A loss in business confidence and a pullback by consumers could "ripple through the economy and cause recession," he said. At the same time, Dow Jones has not changed any plans or decisions on spending and investment, he added.
Dow Jones, which also publishes several local U.S. newspapers, is dealing with an ongoing decline in advertising sales as readers and marketers turn more to the Internet instead of print editions.
Worsening conditions in the housing market also are contributing to the advertising downturn, particularly in real estate and retail sales, Zannino said. Those wider conditions have not affected circulation, he added.
Dow Jones shares rose 20 cents to $58.70 on the New York Stock Exchange, as the wider market rallied on the Fed cut.
Reuters Group Plc. competes with Dow Jones in providing news and data.