S&P lowers MEGA

Standard & Poor's said it lowered the corporate credit and bank loan ratings on MEGA Brands Inc. and its subsidiaries to B- from B. Ratings remain on CreditWatch with negative implications, where they were placed Nov. 9, 2007. The 3 recovery rating on the bank loan is unchanged.

S&P said the downgrade reflects concerns regarding the company's very weak financial risk profile, including the proposed increased debt load and higher debt servicing requirements, following plans to issue C$75 million of 8% senior unsecured convertible debentures due Aug. 31, 2013.

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