Moody's may cut Expedia to junk

Moody's Investors Service said it placed Expedia, Inc.'s Baa3 $500 million 7.456% senior unsecured notes due 2018 on review for possible downgrade following the company's announcement that it intends to repurchase up to 42% of its common stock through a modified Dutch auction tender, which is expected to begin during the week of June 25 and to expire during the week of Aug. 6.

The review will focus on Expedia's receipt of financing to facilitate its share repurchase, the results of the auction tender and its operating prospects and capital structure going forward. The agency said that if the Dutch auction proceeds as planned and is financed with debt, the rating could potentially be downgraded multiple notches below Baa3.

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