Ratings agency Moody's is considering a second downgrade for Central European Distribution Corp in as many months, amid concern that the drinks distributor could default on debt.

Moody's has served notice to Central European Distribution Corp (CEDC) that the company faces a further downgrade to its current B3 rating. Moody's already has the group pegged for a possible debt default, but it said today (20 December) that the chances of this may have increased.

It is reviewing the CEDC's position and said that there is little clarity on how CEDC plans to repay EUR880m of debt, and in particular EUR310m (US$405m) due in March 2013. 

The ratings agency also said that its stance reflects uncertainty around Russian Standard's proposal to raise its stake in CEDC to close to 30%. "The unsolicited offer made by Russian Standard to exchange some assets for an increased participation in CEDC has created significant uncertainty on the future capital structure of the company," Moody's said. 

"Moreover, ongoing difficult trading conditions in Russia and the current distress in the financial markets could challenge the company in addressing its refinancing needs."

Several analysts believe that CEDC's financial position means that it has little choice but to sign a deal with Russian Standard. Renaissance Capital said in a note: "We believe, for CEDC, this may be the last chance to save the company in its current state without selling the business in parts and focusing on operations, while the short-term debt pressure is relieved." 

Last week, Russian Standard's owner, Roustam Tariko, was quoted as saying that a tie-up with CEDC could be completed before the end of the year. The Russian vodka producer already owns a 9.9% stake in US-based, Eastern Europe-focused CEDC, but is looking to raise this by a further 19.9% in exchange for handing over unnamed assets.