Moody’s assigns Liquid Telecom bond B1

Moody’s Investors Service said it assigned a B1 guaranteed instrument rating to the proposed $600 million of senior secured notes to be issued by Liquid Telecommunications Financing plc, a wholly owned subsidiary of Liquid Telecommunications Holdings Ltd.

The notes’ rating is in line with the group’s corporate family rating and reflects the notes’ pari passu position in the capital structure relative to the proposed $60 million revolver issued by Liquid Telecommunications Holdings and the proposed $220 million rand-denominated term loan issued by Liquid Telecommunications South Africa Proprietary Ltd. The senior notes, revolver and term loan will benefit from guarantees from Liquid Telecom and group subsidiaries representing 76.4% of EBITDA and 84.9% of net assets.

The proceeds, along with a $220 million rand-denominated term loan, will be used to refinance $730 million of the senior secured notes, pay the costs associated with the early redemption and repay the $40 million drawn revolving credit facility.

“The early refinancing of the notes is credit positive because it strengthens Liquid Telecom’s liquidity by extending the debt maturity profile,” said Dion Bate, a Moody’s vice president and a local market analyst, in a press release. “In addition, the company’s credits metrics will be less sensitive to currency fluctuations because of the closer currency alignment between debt obligations and cash flows.”

The outlook is negative.

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