Moody's lowers Canwest

Moody's Investors Service said it downgraded Canwest Media Inc.'s probability of default rating and corporate family rating to Ca from Caa3 as it appears inevitable that the company will not pay about $30.4 million of interest prior to the expiration of the applicable 30-day cure period.

The payment was due on March 15, the agency said, adding that Bill Wolfe, vice president and senior credit officer noted that: "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."

To date, as per standard practice, Moody's said it has treated Canwest, Canwest LP and CW Media as comprising a single corporate family. However, while it appears likely that the corporate family will be financially and legally restructured, the manner in which events have transpired suggests that creditor prospects may not be entirely linked.

In particular, the pending default and related activities at Canwest may not have direct ratings' implications at Canwest Ltd. Partnership and CW Media Holdings Inc., the agency said.

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