S&P cuts Gigamon on add-on

S&P said it lowered its issue-level rating on Gigamon Inc.'s first-lien term loan and revolving credit facility to B- from B and revised its recovery rating on the facilities to 3 from 2 on the company’s proposed $150 million add-on to its term loan. The 3 recovery rating indicates the expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default.

“We lowered our issue-level rating to reflect the company's proposed $150 million fungible incremental first-lien term loan, which it plans to use to fully repay its existing second-lien term loan. We view this as a leverage-neutral transaction that has no material impact on our base-case scenario for Gigamon. However, the company's increased amount of first-lien debt and lack of a second-lien debt cushion in a hypothetical default scenario led us to revise our recovery expectations for the first-lien debtholders,” said S&P in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.