UPDATE 1-Another deadline looms in Canwest debt talks

* Tuesday is latest deadline in creditor, noteholder talks

* Canwest seeking to restructure strained balance sheet

* Moody's downgrades probability-of-default rating (Adds details; in U.S. dollars unless noted)

By Wojtek Dabrowski

TORONTO, April 20 (Reuters) - Canwest Global Communications Corp CGS.TO will face another deadline this week in talks with creditors to restructure its debt-laden balance sheet amid a sharp downturn in the advertising market.

Canwest, Canada's biggest media company, has until Tuesday to reach a deal both with its senior lenders and with investors holding its 8 percent senior subordinated notes.

The company already owes a $30.4 million interest payment to the noteholders, who now have the right to demand payment of about $761 million in principal. However, the investors have agreed not to do this until at least April 21, while talks continue.

That date also coincides with a deadline for a deal between Canwest and its senior lenders, who have spent recent months in negotiations. Repeated deadlines have been set before, only to be extended while talks continue.

Moody's Investors Service downgraded one of Canwest's probability-of-default ratings on Monday, and also said it viewed the missed interest payment on the notes as an event of default.

While critical, the senior subordinated note negotiations are only the tip of the iceberg for Winnipeg, Manitoba-based Canwest, which has a debtload of about C$3.7 billion ($3 billion), some of it dating back to its 2000 acquisition of newspaper assets from Hollinger International.

While talks with creditors continue, Canwest's lenders have clamped down on the amount of credit they are willing to advance the company.

The recession continues to choke the advertising market, which is the lifeblood of Canwest's stable of newspapers and television stations. It has also depressed the appetite that potential buyers might have for Canwest's assets.

The company owns a chain of daily newspapers in Canada, including the flagship National Post, as well as the Global television network. It also has television operations in Australia, through its stake in Network Ten.

Earlier this month, Canwest posted a net loss of C$1.44 billion for the three months ended Feb. 28, including a C$1.19 billion writedown related mostly to its publishing operations.

Analysts have said that Canwest could file for bankruptcy protection, but the company thus far has continued to negotiate with creditors rather than involve the courts.

A big part of its debt dates back to the C$3.2 billion deal with Hollinger International.

That acquisition made Canwest the country's biggest publisher of daily newspapers. It included 13 big-city dailies as well as 126 community newspapers, Internet assets and a 50 percent stake in the National Post. The company later bought full control of the Post.

In 2007, Canwest expanded its television holdings by partnering with an affiliate of U.S. investment bank Goldman Sachs (GS.N) to buy specialty-TV group Alliance Atlantis Communications for C$2.3 billion.

Canwest is controlled by the Asper family of Winnipeg. In November, the firm cut 560 jobs at its newspapers and television stations to slash costs and cope with the advertising slowdown.

($1=$1.24 Canadian) (Reporting by Wojtek Dabrowski; editing by Peter Galloway)