Moody's affirms LodgeNet

Moody's Investors Service said it affirmed LodgeNet Entertainment Corp.'s corporate family and probability-of-default ratings at B1, senior secured credit facility at Ba3 (LGD3, 32%) and 9½% senior subordinated notes at B2 (LGD5, 86%).

The outlook is stable.

The affirmation follows the company's announced tender offer for up to $200 million of the 9½% notes with proceeds from an additional $225 million under its new senior secured term loan. If successful, the tender will eliminate the junior debt in the company's capital structure and lower its debt service costs. As a consequence, Moody's said it would lower the bank rating to B1 because the senior secured debt would be the only debt in the capital structure, which, under Moody's expectations, would result in a greater loss given default.

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