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Moody's drops IAC to junk
Moody's Investors Service said it downgraded IAC/InterActiveCorp's corporate family rating to Ba2 from Baa3, the $80 million 2035 liberty bonds guaranteed by IAC to Ba2 (LGD4, 65%) from Baa3 and the remaining 7% senior unsecured notes due 2013 to Ba3 (LGD6, 97%) from Baa3.
Moody's also assigned a Ba1 probability-of-default rating and SGL-1 speculative-grade liquidity rating.
The actions conclude the review for downgrade begun on Nov. 6, 2007 in connection with IAC's announcement that its board approved a plan to separate into five publicly traded companies by spinning off HSN, Inc. (Ba1 corporate family rating), Ticketmaster (Ba2), Interval Acquisition Corp. (Ba3) and Tree.com (not rated) to existing IAC shareholders.
The outlook is stable.
Moody's said the downgrade reflects significant reduction in IAC's scale and business diversity with the spinoff.
The Ba2 corporate family rating reflects sizable net cash position, low leverage and IAC's ability to generate cash through the development of a variety of consumer-oriented internet applications.
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