Moody's on July 26 affirmed Mood Media Borrower LLC's Caa3 corporate family rating and Caa3-PD probability of default rating.
The outlook on the ratings is "negative."
The affirmation is based on the heavy debt service burden of the company on account of its high cost debt capital in the backdrop of a levered balance sheet, said the rating agency.
The rating agency, however, expects the company's liquidity levels to be adequate over the next 12 months, primarily attributable to the cash inflow from the acquisition of Focus Four LLC by Mood Media Corp., the holding company of Mood Media Borrower, and sponsors' agreement to reinvest in the business.
The negative outlook reflects the rating agency's view that the capital structure of the company is not sustainable, and that ratings could be lowered if default risk and loss severity shoot up.