S&P downgrades Mood Media

S&P said it lowered the corporate credit rating on Mood Media Corp. to CC from CCC+.

The outlook is negative.

The agency also said it lowered the ratings on Mood Media's rated 9¼% senior unsecured notes to C from CCC-.

The 6 recovery rating is unchanged, indicating 0 to 10% expected default recovery.

The B rating and 1 recovery rating, which indicates 90% to 100% expected default recovery, on Mood Media's senior secured first-lien credit facilities are unchanged.

The downgrades follow news that Mood offered to exchange its 9¼% senior unsecured notes due 2020 for new 14% cash and paid-in-kind (PIK) second-lien notes due 2024 for a reduced exchange value of $500 per $1,000 of par, plus new common equity shares, S&P said.

The agency said it views the exchange as a reduction in value to lenders and in conjunction with the extension of the debt maturity by seven years and a view of the PIK interest component as a method of delaying payment.

S&P said it views the transaction as tantamount to a default.

The outlook is negative.

S&P said it would lower the corporate credit rating on Mood Media to SD (selective default) and the affected issue-level ratings to D if the debt exchange is completed.

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