Moody’s rates Midcontinent notes B3, loans Ba3

Moody's Investors Service said it assigned a Ba3 to Midcontinent Communications’ new $985 million senior secured bank credit facility, including a term loan and revolver.

Moody's also assigned a B3 to the proposed senior unsecured notes.

Moody's affirmed the B1 corporate family rating and B1-PD probability of default rating.

The outlook remains stable.

The proceeds of the debt offerings will be used to repay the existing secured term loan and unsecured notes, pay down outstanding revolver borrowings, and pay fees and expenses.

While Moody's said it expects the net change in borrowing costs to be lower, and the maturity profile to be more favorable with a longer weighted average, protections for secured lenders will be weakened by amendments to the terms of the credit agreement which will loosen the financial maintenance covenant by 0.25x.

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