Moody’s rates iPayment loan B1, view positive

Moody's Investors Service said it affirmed iPayment, Inc.'s B3 corporate family rating and changed the outlook to positive from stable.

The agency also assigned a B1 rating to iPayment's new $349 million senior secured term loan, and affirmed the B1 rating for the senior secured revolving credit facility and the Caa2 rating for the senior second-lien notes, which are being upsized by $10 million.

iPayment will use the proceeds to refinance the $329 million of outstanding senior secured term loan and fund the acquisition of a target Independent Sales Organization.

Moody's said it will withdraw the ratings for the existing senior secured term loan and the stub portion of the senior unsecured notes due 2019 upon the closing of the refinancing and the repayment of the debt. The company expects to benefit from lower pricing for its senior secured term loans.

Moody’s said the positive outlook reflects the sustainable improvement in iPayment's operating performance and the agency’s expectations for stable free cash flow generation of about 6% to 8% of total adjusted debt (before residual expenses) over the next 12 to 18 months.

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