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.

U.S. information technology services and transaction processing

Affiliated Computer Services, Inc., Ba2; probability-of-default rating, Ba3; revolver, term loan and notes, Ba2, LGD3, 32%.

Cardtronics, B2; probability-of-default rating, B2; subordinated debt, upgraded to B3 from Caa1, LGD5, 72%.

Electronic Data Systems Corp., Ba1; probability-of-default rating, Ba1; senior notes and convertible senior notes, Ba1, LGD4, 55%; subordinated shelf, prospective Ba2, LGD6, 97%; preferred shelf, upgraded to prospective Ba2 from Ba3, LGD6, 97%.

Fidelity National Information Services, Inc., Ba1; probability-of-default rating, Ba1; senior unsecured notes, downgraded to Ba2 from Ba1, LGD6, 95%; revolver and term loans, Ba1, LGD3, 47%.

Global Cash Access, Inc., B1; probability-of-default rating, B1; revolver and term loan, upgraded to Ba2 from Ba3, LGD2, 28%; notes, B3, LGD5, 81%.

iPayment, Inc., B2; probability-of-default rating, B2; revolver and term loan, upgraded to B1 from B2, LGD3, 36%; notes, Caa1, LGD5, 89%.

SunGard Data Systems Inc., B2; probability-of-default rating, B2; revolver and term loan, upgraded to Ba3 from B1, LGD2, 26%; senior notes due 2009 and 2014, downgraded to B3 from B2, LGD4, 67%; senior notes due 2013, downgraded to Caa1 from B3, LGD5, 79%; senior subordinated notes, Caa1, LGD6, 94%.

TDS Investor Corp., B2; probability-of-default rating, B2; revolver, letter-of-credit facility and term loan, upgraded to Ba3 from B1, LGD2, 29%; senior unsecured notes, downgraded to Caa1 from B3, LGD5, 78%; subordinated notes, Caa1, LGD6, 93%.

Unisys Corp., B2; probability-of-default rating, B2; notes, B2, LGD4, 57%.

Worldspan, LP, B2; probability-of-default rating, B2; revolver and bank credit facility, upgraded to Ba3 from B2, LGD2, 24%; second-lien notes, B3, LGD5, 73%; senior subordinated, upgraded to Caa1 from Caa2, LGD6, 96%.

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