Alliance Films’ debt outlook has been cut to ‘negative’ by Moody’s Investors Service, despite a recent $40-million cash injection from main shareholders Société générale de financement du Québec and Wall Street giant Goldman Sachs & Co.

The U.S. credit-rating agency said it dropped the rating on the credit profile for the indie distribution giant from CAA1 to CAA2 because of the company’s heavy debt load and weak liquidity.

Alliance SVP of marketing and publicity Mark Slone had no direct comment on Moody’s ratings change, but did insist the company remains profitable and retains the backing of its main shareholders.

Moody’s and rival Standard & Poor’s first raised red flags last spring over the ability of Alliance to satisfy its financial covenants.

In its latest note, Moody’s confirmed that Alliance met its lending requirements on June 30 and avoided a payment default as it received a cash infusion — $21 million from majority shareholder Goldman Sachs and another $13 million from SGF, the investment arm of the Quebec government.

After it was taken over last year by Goldman Sachs, Alliance received an initial $100-million cash injection from SGF, which shifted the distributor’s headquarters to Montreal.

Moody’s added that Alliance should meet its debt obligations through 2009. After that, the company’s balance-sheet health will depend on its performance at the box office.

The successful theatrical release of Hollywood movies in Canada by domestic distributors is key to establishing a track record to secure lines of credit.

Recent summer hits for Alliance include Sex and the City and Journey to the Centre of the Earth 3D. Those followed high-profile box-office duds like The Golden Compass.

The Moody’s downgrade could impact Alliance’s ability to secure credit in a down-market at a time when it is ramping up its film pipeline after recently signed output deals with U.S. giants Relativity Media, Grosvenor Park and Freestyle Releasing.

The new multi-year deals come on top of existing ones with New Line Cinema, Focus Features, The Weinstein Company, Overture Films and Remstar.

Alliance currently has an approximately 15% share of the Canadian market, which puts it ahead of rivals Entertainment One and Maple Pictures.