S&P: EMI Group unaffected

Standard & Poor's said its ratings on EMI Group plc (BB-/Watch negative/B) remain unchanged after the company announced that it expects revenues in its recorded music division, 80% of revenues and 61% of EBITDA for the fiscal year ended March 2006, to decline by 15% in the fiscal year ended March 31 at constant currencies.

The ratings also remain on CreditWatch with negative implications, where they were placed on Feb. 5, the agency noted, adding that the announcement followed a 20% drop in the U.S. physical music market, according to Soundscan, in January.

"EMI's revised estimate is significantly below the 6%-10% revenue drop indicated last month by the company, which increases the risks of a downgrade upon resolution of the CreditWatch," said S&P credit analyst Patrice Cochelin.

The agency added that it remains concerned about EMI's debt burden, which is likely to increase in the coming months as a result of falling profits, a £150 million restructuring program and the £93 million acquisition of minority interests in Japan.

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