Moody’s drops Sound Global, debt

Moody's Investors Service said it downgraded Sound Global Ltd.’s corporate family rating to Caa1 from Ba3 and senior unsecured debt rating to Caa2 from B1.

The outlook was changed to negative from review for downgrade.

Moody’s said the downgrades follow the company's announcement that (a) its external auditor has identified potential audit issues, which are holding up the completion of the company's audited 2014 annual results; (b) its board of directors has resolved to set up an independent review committee and considers engaging independent forensic accountants to conduct an investigation; and (c) an independent non-executive director – who was the chairman of audit committee and nomination committee and a member of remuneration committee of the company – has resigned.

"The downgrade reflects Moody's concern that the company's default risk on its offshore bonds will increase in the near term," Moody's vice president and senior analyst Chenyi Lu said in a news release.

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