Moody's cuts TCM Media outlook to negative

Moody's Investors Service said it changed the outlook of TCM Media, Inc. to negative from stable and affirmed the company's B2 $20 million first-lien senior secured revolving credit facility due 2009, B2 $89 million first-lien senior secured term loan B due 2010, B3 $30 million second-lien senior secured term loan due 2010 and B2 corporate family rating.

The agency said the change in outlook reflects TCM Media's relatively weak operating performance for the year to date and constrained liquidity, which have contributed to the company's request for covenant relief under its senior secured loan agreements. In addition, Moody's is concerned with management's decision to use cash on its balance sheet coupled with a drawing under its revolving credit for acquisition purposes, rather than to maintain or bolster liquidity and preserve financial flexibility, assuming that the existing lenders agree to the proposed amendment.

Nevertheless, the ratings affirmation reflects the customer diversification and relative stability of TCM Media's newspaper publishing business model and, to a lesser degree, its sports marketing and production businesses, the agency added.

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