Moody's lowers Thomson

Moody's Investor's Service said it downgraded Thomson SA's corporate family and probability-of-default ratings to Ba2 from Ba1 and its perpetual junior subordinated bonds to B2 (LGD6, 100%) from Ba3 (LGD6, 97%).

The outlook remains negative.

The agency said the downgrade was triggered by Thomson's announcement that additional restructuring would be required to further reduce costs and improve profitability as well as the sales evolution of the first half 2008 that is more negative than previously expected by Moody's. Thomson now expects to report a loss from continuing activities before interest and tax for the first six months of 2008.

In addition, the company is planned to cut the dividend payment, which raises Moody's concerns that a non-payment of the coupon for the €500 million perpetual junior subordinated bond becomes a possible scenario.

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