Moody’s cuts Sesac, rates loan Caa2

Moody's Investors Service said it assigned a Caa2 rating to Sesac Holdco II LLC's new $90 million second-lien term loan.

In connection with this action, the agency downgraded Sesac's corporate family rating to B3 from B2 and affirmed the existing first-lien credit facilities at B2 (which includes the first-lien term loan that was upsized by $25 million to $367 million outstanding as part of this transaction and $15 million revolver) and probability of default rating at B3-PD.

The outlook is stable.

Net proceeds will be used to pay an estimated $110 million dividend to private equity sponsors, Rizvi Traverse controlled entities and minority shareowners.

Given the insertion of second-lien debt in Sesac's capital structure, the first-lien credit facilities' rating was maintained at B2, despite the downgrade of the corporate family rating by one notch, to reflect the loss absorption cushion provided by the new junior debt in a distressed scenario under Moody's Loss Given Default Methodology.

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