Moody's lowers Charter PDR to Ca

Moody's Investors Service said it lowered Charter Communications, Inc.'s probability-of-default rating to Ca from Caa2 and placed all ratings other than the SGL-3 speculative-grade liquidity rating on review for possible downgrade, including Charter's Caa1 corporate family rating and Ca (LGD5, 87%) senior unsecured notes.

Other ratings on review are Charter Communications Holdings, LLC's Ca (LGD5, 85%) senior unsecured notes; CCH I Holdings, LLC's Caa3 (LGD5, 77%) senior unsecured notes; CCH I, LLC's Caa3 (LGD4, 60%) senior secured notes; CCH II, LLC's Caa2 (LGD3, 42%) senior unsecured notes; CCO Holdings, LLC's Caa1 (LGD3, 34%) senior unsecured notes and B3 (LGD2, 29%) senior secured first-lien term loan; and Charter Communications Operating, LLC's B3 (LGD2, 23%) senior secured second-lien notes and B1 (LGD1, 6%) senior secured first-lien revolver and term loan.

The agency said the rating actions were prompted by the announcement that financial advisers have been engaged to initiate discussions with bondholders. Specifically, the probability-of-default rating reflects Moody's expectation that default (beyond those that occurred via various distressed exchanges over the last couple of years) is imminent and that a restructuring of the company's balance sheet via some form of a much more material distressed exchange and/or bankruptcy filing is likely to occur preemptively in 2009, notwithstanding the sufficiency of liquid resources to maintain operations into 2010.

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