Trinity Mirror says trading within debt covenants

LONDON (Reuters) - Media group Trinity Mirror (TNI.L) said on Wednesday it was trading comfortably within the covenants for its debt facilities after shares in the struggling newspaper publisher tumbled on market concerns.

Trinity, which warned on profits two weeks ago due to a deteriorating advertising market, said in a statement the majority of the company's borrowings were through a U.S. dollar private placement.

With the exception of a repayment of around 60 million pounds in October 2008, no further repayments were due until October 2011, Trinity said.

Kaupthing analyst Jonathan Barrett had said earlier that Trinity could breach its net debt/EBITDA (earnings before interest, tax, depreciation and amortisation) covenant if it felt full effects of a recession.

Trinity responded by saying that it was easily within its principal covenants of net debt of no more than four times EBITDA and interest cover not less than two times. As of June 29, its net debt was about 425 million pounds, it said.

The news helped Trinity shares pare earlier losses but by 1:49 p.m. they were still down 8.2 percent at 50.25 pence, after hitting a two-year low of 41.50 pence earlier in the day.

The publisher of the Daily Mirror also said it had a new 210 million pound bank facility secured during June 2008, with covenants to keep net debt below 3.25 times EBITDA and interest cover at least three times. No cash had been drawn.

"The company continues to be cash generative and to perform in line with expectations following the trading update issued on 30th June," it said.

Trinity said it would provide an update on its pension-scheme funding with its interim results on June 30. Kaupthing's Barrett had said he expected Trinity to increase cash contributions to the scheme.