Moody's cuts EMI debt to Ba3

Moody's Investors Service said it downgraded EMI Group plc's corporate family and senior debt ratings to Ba3 from Ba2, including its 8 ¼% bonds due 2008 and the 8.625% euro notes due 2013, along with Capitol Records Inc.'s 8.375% guaranteed notes due 2009.

All ratings remain under review for possible further downgrade.

This action follows the announcement that EMI will incur up to £150 million in incremental restructuring costs, has performed below its expectations during its financial year-to-date, and is reviewing its balance sheet.

Moody's said it believes that EMI's risk profile and debt-protection measurements will no longer be in line with the Ba2 rating category. The ongoing review reflects uncertainties about the strategic direction and performance potential of the company's recorded music business against the backdrop of still struggling global markets and about possible changes in the medium-term balance sheet structure.

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