Moody's lowers Cygnus

Moody's Investors Service said it downgraded Cygnus Business Media, Inc.'s corporate family and probability-of-default ratings to Caa1 from B3, its first-lien senior secured bank loan rating to B3 (LGD3, 42%) from B2 (LGD3, 42%) and second-lien senior secured facility due 2010 to Caa3 (LGD6, 91%) from Caa2 (LGD6, 91%).

The agency continued the review for further downgrade, following the company's disclosure that it is currently in default under the financial covenants of its first-lien senior secured loan agreements.

Moody's said the downgrade of the corporate family rating follows Cygnus's recent disclosure that at the end of June that it failed to comply with the financial ratio tests stipulated by the terms of its first-lien senior secured loan agreement and its series A preferred shareholders agreement.

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