Moody's confirms IMAX

Moody's Investors Service said it confirmed IMAX Corp.'s Caa1 corporate family and probability-of-default ratings as well as the Caa2 rating (LGD4, 59%) on its senior unsecured bonds.

The agency said it confirmed the ratings after the company filed its 10-K for 2006 and 10-Q for March, which cures the default and alleviates the risk of bondholder acceleration due to the previous breach of the company's financial reporting covenant.

The outlook is positive, changed from under review.

Moody's said the fundamental operating metrics suggest an ability to manage the business, and studios and exhibitors' willingness to sign new contracts despite accounting problems.

The ratings are supported by adequate liquidity from balance sheet cash and its revolving credit facility, a highly enforceable backlog of signed contracts and the value of the IMAX brand.

The Caa1 corporate family rating reflects the lack of visibility regarding IMAX's long-term cash flow prospects and high financial risks, the agency said.

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