Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

Business services

ADESA, Inc., Ba2; probability-of-default rating, Ba2; revolver and term loan, upgraded to Ba1 from Ba2, LGD3, 33%; notes, B1, LGD5, 87%.

Affinion, B2; probability-of-default rating, B2; revolver and term loan, upgraded to Ba3 from B1, LGD2, 24%; senior notes, B3, LGD5, 70%; senior subordinated notes, Caa1, LGD6, 91%.

Allied Security Holdings LLC, B2; probability-of-default rating, B2; revolver and term loan, Ba3, LGD2, 29%; notes, Caa1, LGD5, 84%.

Aramark Corp., Ba3; probability-of-default rating, Ba3; senior unsecured shelf, prospective B2, LGD6, 96%; senior subordinated shelf, prospective B2, LGD6, 97%. Aramark Services, Inc., notes, B2, LGD6, 96%; senior unsecured shelf, prospective B2, LGD6, 96%; senior subordinated shelf, prospective B2, LGD6, 97%.

Brickman Group, Ltd., Ba3; probability-of-default rating, Ba3, revolver and term loan, upgraded to Baa3 from Ba3, LGD1, 5%; notes, upgraded to Ba3 from B2, LGD4, 55%.

Danka Business Systems plc, B3; probability-of-default rating, B3; notes, B3, LGD3, 49%.

FTI Consulting, Inc., Ba2; probability-of-default rating, Ba2; senior notes, Ba2, LGD3, 44%; convertible senior notes, B1, LGD6, 90%.

Insurance Auto Auctions, Inc., B2; probability-of-default rating, B2; revolver and term loan, upgraded to Ba3 from B2, LGD2, 23%; notes, Caa1, LGD5, 79%.

Iron Mountain Inc., B2; probability-of-default rating, B2; revolver and term loan, upgraded to Ba2 from Ba3, LGD2, 10%; notes, B3, LGD4, 66%; secured shelf, upgraded to prospective Ba2 from prospective Ba3, LGD2, 10%; senior unsecured shelf, upgraded to prospective Ba3 from B2, LGD2, 27%; subordinated shelf, prospective B3, LGD4, 66%; preferred shelf, prospective Caa1, LGD6, 97%. IM Capital Trust I, trust preferred stock shelf, prospective B3, LGD4, 66%.

JohnsonDiversey, Inc., B2, probability-of-default rating, B2; revolver and term loans, upgraded to Ba2 from B1, LGD2, 10%; notes, upgraded to B3 from Caa1, LGD4, 59%. JohnsonDiversey Holdings, Inc., discount notes, Caa1, LGD6, 93%.

Language Line Holdings, Inc., B2; probability-of-default rating, B2; discount notes, upgraded to Caa1 from Caa2, LGD6, 93%. Language Line, Inc., revolver and term loan, upgraded to Ba3 from B2, LGD2, 24%; notes, upgraded to B3 from Caa1, LGD5, 74%.

MSX International, Inc., B3; probability-of-default rating, B3; senior notes, upgraded to Ba3 from B3, LGD1, 8%; senior subordinated notes, upgraded to Caa1 from Ca, LGD5, 72%.

Muzak Holdings LLC, Caa1; probability-of-default rating, Caa1; discount notes, upgraded to Caa3 from Caa3, LGD6, 96%. Muzak LLC, senior unsecured notes, upgraded to Caa1 from Caa2, LGD3, 45%; senior subordinated notes, upgraded to Caa3 from Ca, LGD5, 86%.

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