S&P lowers CanWest

Standard & Poor's said it lowered its ratings on CanWest MediaWorks Inc., including the long-term corporate credit rating to B from B+.

At the same time, the agency said that the ratings on CanWest MediaWorks were removed from CreditWatch with negative implications, where they were placed Jan. 10, following the announcement by CanWest Global Communications Corp. (unrated), the parent of CanWest MediaWorks, Alliance Atlantis Communications Inc. (BB/Watch negative), and GS Capital Partners VI LP that a new acquisition company, formed by CanWest and GS, had entered into an arrangement agreement with Alliance Atlantis to acquire all of Alliance Atlantis' voting and non-voting shares.

The outlook is stable.

In addition, S&P said it assigned ratings to CanWest MediaWorks' wholly owned subsidiary, CanWest MediaWorks Limited Partnership, adding that it assigned a BB- bank loan rating, with a recovery rating of 1, to CanWest LP's proposed C$950 million senior secured bank loan.

S&P added that it assigned a CCC+ debt rating to its proposed $650 million senior subordinated notes due 2017.

According to the agency, the ratings on CanWest MediaWorks reflect its weakened credit measures, highly leveraged financial policy, soft operating performance and very competitive operating environment while these factors are partially offset by the company's leading Canadian market position and business diversity afforded by its domestic television broadcasting, newspaper publishing and international assets, which help mitigate the effect of advertising revenue and newsprint price cycles.

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