Moody’s ups Language Line, rates loans B1, Caa1

Moody's Investors Service said it upgraded Language Line Holdings, LLC's corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD.

At the same time, the agency assigned a B1 rating to operating subsidiary Language Line LLC's proposed $530 million first-lien senior secured credit facility, consisting of a $480 million first-lien term loan and a $50 million revolving credit facility, as well as a Caa1 rating to the $160 million proposed second-lien term loan.

The outlook was revised to stable from negative.

Net proceeds will be used to refinance existing debt and repay a seller note.

In addition, the company will enter into a new $50 million revolving credit facility, which will be undrawn at close. The financing is expected to close by the end of June 2015. The ratings for Language Line's existing credit facilities will be withdrawn upon repayment and cancellation of the credit facilities.

Moody’s said the upgrade of the corporate family rating to B2 incorporates Language Line's timely completion of the refinancing transaction on currently proposed terms. The refinancing increases the company's financial flexibility by providing ample cushion under proposed covenants and extending the debt maturity profile.

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