Moody's rates Interpublic convertibles Ba3

Moody's Investors Service said it assigned a Ba3 senior unsecured debt rating with a loss-given-default assessment of LGD4 (66%) to Interpublic Group of Cos., Inc.'s new $400 million 4.25% convertible senior notes due 2023.

The outlook is negative.

The $400 million of new notes were exchanged for $400 million of the company's Ba3 4.5% convertible senior notes due 2023. The new notes are pari passu with the remaining $400 million 4.5% convertible notes and all of Interpublic's other senior unsecured debt. The new notes bear a slightly lower interest rate, are not callable until March 15, 2012 rather than Sept. 15, 2009 and are not putable until March 15, 2012 and March 15, 2015 rather than March 15, 2008 and March 15, 2013.

"The exchange preemptively begins to chip away at the Interpublic's looming 2008 large debt maturities and it provides the company with added liquidity headroom to get its house in order, since it is still in the midst of a significant turnaround and internal control weakness remediation program," Moody's senior vice president Neil Begley said in an agency rating.

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