Moody's assigns Ba2 to DigitalGlobe loan, B1 to notes

Moody's Investors Service said it affirmed DigitalGlobe, Inc.'s corporate family rating at Ba3, affirmed the speculative-grade liquidity rating at SGL-2 and upgraded the probability-of-default rating to Ba3-PD from B1-PD. In addition, Moody's assigned a Ba2 (LGD2, 27%) rating to the company's proposed $150 million revolving credit facility and $550 million secured term loan B and a B1 (LGD5, 81%) rating to the proposed $500 million senior notes due 2021. The outlook is stable.

New issue proceeds together with stock and cash will be used to finance DigitalGlobe's pending acquisition of GeoEye, Inc. and to repay existing debt at both companies.

The agency said DigitalGlobe's Ba3 rating primarily reflects the company's leading position in the commercial satellite imagery market and the difficulty in replicating the specialized products and services provided by companies like DigitalGlobe. The rating is also supported by the improving competitive dynamics in the current budget-constrained global market aided by the pending combination with GeoEye and the material capex rationalization that Moody's expects after the acquisition.

The rating is tempered by the technology and business risks inherent in DigitalGlobe's high customer and asset concentration and the longer-term uncertainty relating to the company's strategy to meet shareholder return expectations, the agency said.

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