Moody's confirms CanWest

Moody's Investors Service said it confirmed CanWest MediaWorks Inc.'s Ba3 corporate family rating and B2 senior subordinate rating.

At the same time, Moody's said it changed CanWest's speculative-grade liquidity rating to SGL-2 from SGL-3.

The long term ratings reflect a Ba3 Probability of default and an LGD 5 (87%) assessment on the senior subordinated notes, the agency noted.

The outlook is negative.

In its decision to confirm the ratings, Moody's said it stated that while CanWest's recent underperformance has significantly weakened the company's key credit metrics, the potential for its Canadian television operations to improve from a historically low base in addition to ongoing cost reduction measures should help reduce adjusted consolidated leverage to under 5x and produce low single-digit free cash flow to debt by the end of 2008.

Moody's said it also recognized the significant and established positions CanWest maintains in the Canadian newspaper publishing sector and the value of its cash yielding investments in Australia's Network TEN and other global media properties.

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