TORONTO – The news does not appear to be improving for Canwest Global Communications Corp.
Moody’s Investors Service has downgraded its probability of default rating (PDR) and corporate family rating (CFR) to Ca from Caa3, saying “it appears inevitable” that the debt-laden media giant will not pay the approximately $30.4 million of interest before “the expiration of the applicable 30 day cure period”.
The payment was originally due on March 15, but that deadline was extended.
"Even should a forbearance agreement be agreed-to, per standard practice, Moody’s will view the payment missed at the end of the original cure period as constituting a default," said Bill Wolfe, Moody’s vice president and senior credit officer, in a statement.
Moody’s also said that that creditor prospects of the various divisions of Canwest may not necessarily be linked, and it has therefore placed the ratings of Canwest LP and CW Media on review.
"Should, for example, Canwest default or voluntarily file for creditor protection while Canwest LP and CW Media continue to operate without interruption,then it will be clear that separate (although related) ratings will be required,” Wolfe continued. “Alternatively, again for example purposes, should two or more of the companies be involved in the same creditor protection filing, their ratings will remain linked."
Moody’s said that it expects to conclude the ratings review within 30 to 45 days of the expiry of the ongoing interest payment cure period.
