TORONTO – Moody’s Investors Service has assigned ratings to the new debt instruments of CW Media Holdings Inc., the company that will hold specialty channels to be acquired from Alliance Atlantis.
CW’s new secured debt instruments were assigned Ba1 ratings, while the unsecured debt instruments were assigned B2 ratings.
CW is the new joint venture between CanWest Media Works Inc. and Goldman Sachs Capital Partners.
Moody’s also said CanWest’s ratings outlook continues to be stable. It affirmed the B1 corporate family rating and its SGL-2 speculative grade liquidity rating. However, the revisions to the company’s consolidated debt structure resulted in certain revisions to loss given default ratings and percentages.
“Moody’s views CanWest as having a very strong portfolio of properties in the newspaper publishing and television broadcasting sectors. Consolidated margins are expected to be strong, and cash generation reflects a geographically diverse asset base,” according to a statement by Moody’s analysts.
“CanWest’s B1 CFR is influenced primarily by aggressive financial leverage and the uncertainties related to the very complex financing that has been implemented to acquire Alliance Atlantis’ specialty television properties,” the analysis said. “Elevated leverage results from the combination of recent and pending debt-financed acquisition activity (respectively, the newspaper going private transaction and the specialty television transaction) and reduced cash flow generation at existing television properties. There are also uncertainties related to how much and how quickly results at existing broadcast operations can be improved. Off-setting this aggressive financial profile is a strong business profile.”
