Heard on the grapevine

Is EMI preparing to refinance its debt as the record company and music publisher prepares to take full control of the Motown back-catalogue?

That was the suggestion from Moody's yesterday when the debt-rating agency predicted that EMI will refinance the remaining portion of a £100m bridging loan, which falls due at the end of December, before closing a deal to buy out Jobete, publisher of much of the Motown songbook, early next year.

Moody's does not believe EMI can make debt-financed acquisitions until it has "substantially and sustainably" improved its debt protection measurements.

To maintain its current debt rating EMI needs to find adequate funding for the purchase of the 50% stake in Jobete with plenty of time left to spare before its payment obligations for the purchase fall due, Moody's said.

If EMI is unable to deliver a substantial operating performance improvement during the current financial year it could face a further downgrade. EMI closed down 15p at 205p.