Credit Turmoil Hurts Warner, EMI's Plan: FT

Credit market turmoil is hampering plans by EMI and Warner Music to issue billions of dollars in debt backed by revenue from their publishing catalogues, the Financial Times reported in its online edition.

The newspaper said both companies have been mulling this move as they deal with an industry-wide collapse in compact disc sales and the transition to digital distribution.

The proceeds from such a transaction could have been used to refinance outstanding debt, pay a dividend to disgruntled shareholders and reinvest in core operations, the Financial Times said.

But given the distressed state of the credit markets, neither company is expected to press ahead soon, the newspaper said.

Representatives of both companies could not immediately be reached for comment.

"In the current debt markets, it just isn't going to happen," a person close to EMI told the Financial Times.