Moody's may cut CBD Media

Moody's Investor Service said it placed the ratings for CBD Media LLC, the principal operating subsidiary of CBD Media Holdings LLC, on review for possible downgrade following the company's announcement that it is considering a dividend to the company's equity sponsors potentially funded by a $75 million to $100 million senior note issuance at CBD Holdings and a $25 million increase in its secured bank debt.

On review are CBD's Ba3 rated $130 million of secured bank credit facilities, B3 rated $150 million of senior subordinated notes due 2013, B1 senior implied rating and B3 senior unsecured issuer rating.

Moody's said the review for downgrade is predicated on significant additional leverage for the company, increasingly limited financial flexibility, with minimal margin for error, as a direct result of management's aggressive use of debt to provide dividends for its equity sponsors.

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