DBRS Downgrades Canwest Media Inc.’s Issuer Rating to D

DBRS has today downgraded the Issuer Rating of Canwest Media Inc. (Canwest Media or the Company) to D from C. This action follows today’s downgrade of the Issuer Rating at Canwest LP (the operating company of Canwest Media).

Canwest Media’s Senior Subordinated Notes were downgraded to D on April 15, 2009, as a result of missed interest payments on the notes and continuation of non-payment past the 30-day cure period. As of May 31, 2009, the aggregate carrying value of debt at Canwest Media amounted to $954 million. The Company has indicated that it does not have sufficient liquidity to satisfy any such demands for payment.

The downgrade of the Issuer Rating to D is driven by the downgrade of Canwest LP’s ratings to D and the fact that Canwest Media’s instrument rating on its Senior Subordinated Notes is also at D. While a formal recapitalization or restructuring has not occurred, DBRS is of the opinion that Canwest Media’s Issuer Rating is now in default as defined in DBRS’s rating methodology.

DBRS today also downgraded Canwest LP’s instrument and Issuer Rating as a result of missed interest and principal payments on its debt obligations, continuation of non-payment past the 30-day cure period and ongoing liquidity concerns (see separate Canwest LP press release for details).

DBRS notes that Canwest Media’s non-payment of interest is intended to provide the Company with the ability to continue to operate its core media businesses as it continues to negotiate a recapitalization transaction at this level and at its newspaper subsidiary, Canwest LP.

The Issuer Rating at Canwest Media shall remain at D until the earlier of: (a) the implementation of an effective recapitalization plan; (b) the emergence from creditor protection, should the Company choose to file under the Companies’ Creditors Arrangement Act (CCAA); or (c) DBRS elects to withdraw this rating.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Media and Entertainment, which can be found on our website under Methodologies.

This is a Corporate (Publishing & Media) rating.