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Published on 10/24/2006 in the Prospect News Bank Loan Daily and Prospect News High Yield Daily.

Moody's may upgrade Alliance Atlantis

Moody's Investors Service said it placed the Ba2 corporate family rating, Ba1 senior secured debt rating and Ba3 probability-of-default rating of Alliance Atlantis Communications Inc. under review for possible upgrade.

The agency said the rating action follows the company's announcement that it will explore ownership alternatives for its 51% interest in Motion Picture Distribution LP and reflects the reasonably strong performance of Alliance Atlantis' core broadcasting and "CSI: Crime Scene Investigation" TV franchise assets, which are producing meaningful free cash flow in relation to debt levels.

The review will focus on Moody's expectation for the sale of Motion Picture Distribution to occur in whole or in part, Alliance Atlantis' plans for any resulting cash proceeds in context of the company's stated capital structure target range of 1.5x to 2.5x net debt to EBITDA, the future prospects for Alliance Atlantis' core broadcasting and CSI TV franchise assets and Moody's expectations that management may divert cash to shareholders via continued share buybacks or through the implementation of a dividend.


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