Moody’s Cuts Debt Ratings for Adelphia

Adelphia Communications Corp.’s debt ratings were cut by Moody’s Investors Service, which said the No. 6 U.S. cable TV operator faces imminent bankruptcy and that the company’s common stockholders probably will be wiped out.

Investors with Adelphia, which has about $19.3 billion of rated debt, will probably suffer “greater than previously anticipated” losses, Moody’s said.

“Until very recently, we believed some transaction might have provided some stay of relief for the company,” said Russell Solomon, the Moody’s senior vice president who wrote the report. “We no longer consider that the case.”

Moody’s cut Coudersport, Pa.-based Adelphia’s junk-rated senior unsecured debt one notch to Caa2, its fourth-lowest grade, from Caa1, and its convertible subordinated notes two notches to Ca, its second-lowest grade, from Caa2. Its rating outlook is negative.

Shares of Adelphia closed in over-the-counter trading near 81 cents, down about 4 cents.