Moody's upgrades WMG

Moody's Investors Service said it raised the corporate family rating for WMG Holdings Corp. to Ba3 from B1, its senior unsecured discount notes to B3 from Caa2 and WMG Acquisition Corp.'s senior secured bank credit facility to Ba2 from B1 and senior subordinated regular bond/debenture to B2 from B3.

The outlook was changed to stable from positive.

The upgrade considers the decline in leverage, driven by debt reduction and EBITDA growth, as well as improved clarity on the company's financial position following the filing of its 10-K and the remediation of two of its three previously reported material weaknesses in internal controls, the agency said.

Ratings reflect WMG's attractive asset base, strong cash flow margins and expectations for continued free cash flow growth, offset by challenging industry conditions and lingering concerns over the company's historic propensity to favor shareholders over creditors, the agency said.

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