Fitch rates Gigamon loan B+

Fitch Ratings said it downgraded the rating for Gigamon Inc.’s $50 million first-lien secured revolver and the upsized $542 million first-lien secured term loan to B+/RR3 from BB-/RR2. The downgrade of Gigamon's first-lien term loan reflects the lower recovery of the upsized loan.

On Wednesday, Gigamon announced plans to upsize its first-lien term loan by $150 million. The proceeds will be used to repay the $150 million second-lien term loan. The transaction is leverage neutral. However, the recovery prospect for the upsized first-lien term loan would decrease, resulting in the recovery rating being downgraded to RR3 from RR2 and the first-lien rating downgraded to B+ from BB-, Fitch said.

Fitch affirmed Gigamon’s B rating and changed the outlook to stable from negative.

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