Moody's may downgrade Prism Business Media

Moody's Investors Service said it placed all ratings of Prism Business Media, Inc. under review for possible downgrade following the company's announcement that it has entered into an agreement to acquire Penton Media, Inc. for an estimated transaction value of $530 million.

The ratings placed under review include the company's B2 corporate family and probability-of-default ratings, B1 (LGD3, 36%) senior secured first-lien revolver due 2011 and term loan due 2012 and Caa1 (LGD5, 87%) senior secured second-lien term loan due 2013.

The agency said the acquisition could lead to heightened financial pressure for Prism. Moody's review will focus upon the likely capital structure of the surviving entity, the degree to which the acquisition will constrain Prism's liquidity or worsen its leverage, the ability of the merged entity to effect synergies and whether the transaction indicates further acquisition activity by Prism.

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