Moody's affirms Riverdeep

Moody's Investors Service said it affirmed the existing ratings of Riverdeep Holdings plc and related entities, including the B2 corporate family rating, Riverdeep Group Ltd.'s B3 senior note rating and Riverdeep Interactive Learning Ltd.'s B1 senior secured facility rating.

The outlook is negative.

The rating action concludes the review for possible downgrade initiated by Moody's on July 19 following Riverdeep's announcement of plans to issue a $150 million senior paid-in-kind loan, the final issuance of which amounted to $175 million.

Since the B2 rating was assigned a negative outlook in December 2004, Moody's said the company has achieved visible operational and financial progress.

The agency noted, however, that results from the first quarters of 2005 and 2004 are not directly comparable due to the changes in the retail outsourcing of supplemental education and personal publishing software to Encore which resulted in a change of the company's revenue recognition.

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