Mavenir Systems term loan unfazed in trading by Moody’s cut to ratings

By Sara Rosenberg

New York, Aug. 28 – Mavenir Systems Inc.’s senior secured first-lien term loan held steady in the secondary market on Monday despite being downgraded by Moody’s Investors Service.

The term loan was quoted at 75 bid, 80, unchanged from Friday’s levels, a trader remarked.

During the session, Moody’s trimmed the company’s senior secured first-lien bank credit facility rating and corporate family rating to Caa1 from B3. The outlook is stable.

The downgrade reflects significantly lower revenue and EBITDA expectations over the next 12 to 18 months, due primarily to economic uncertainties, slower than expected radio deployments, and a significant delay by a major customer to deploy Mavenir’s solution in a fixed wireless architecture, Moody’s said in the rating release.

Moody’s also pointed to the company’s weak liquidity as a reason for the downgrade. Mandatory payments will be in excess of internal sources, and there is limited availability on the revolver – no more than about $26 million – given the 5.6x consolidated net leverage covenant that springs when the revolver is more than 35% drawn, which would breach the test. Moody’s expects the company to draw the maximum available capacity over the next 12 months. In addition, alternate liquidity is very limited with an all-bank capital structure and asset-lite business model.

Mavenir is a Richardson, Tex.-based network software provider.

Fund flows

In other news, actively managed loan fund flows on Friday were negative $20 million and loan ETFs were negative $12 million, market sources said.

Year to date, outflows for loan funds total $19 billion, with negative $803 million ETFs, sources added.

Loan bids rise

According to IHS Markit data, average secondary market bids in the United States on Friday were 92.53, up 0.02% from the previous day and up 0.72% year to date.

Some of the top advancers on Friday were Lucky Bucks’ July 2021 covenant-lite term loan at 30.13, up from 29.35, Liftoff Mobile/Vungle’s September 2021 covenant-lite term loan B at 93.06, up from 91.38, and Valcour Packaging/Mold-Rite Plastics’ October 2021 covenant-lite term loan at 78, up from 76.75, IHS Markit data said.

Some top decliners on Friday were Cano Health’s January 2022 covenant-lite term loan at 61.7, down from 69.4, Packers Sanitation Services/PSSI’s March 2021 covenant-lite term loan at 66, down from 68.69, and Diamond Sports/Sinclair/Regional Sports’ March 2022 first priority term loan at 62.33, down from 64.8.

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