Moody's changes Mitel liquidity rating to SGL-4

Moody's Investors Service said it changed Mitel Networks Corp.'s speculative grade liquidity rating to SLG-4 (weak) from SGL-3 (adequate) on concerns that EBITDA expansion may not be sufficient to maintain financial covenant compliance cushions as thresholds become more stringent in quick succession over the next several quarters.

However, given prospects for EBITDA expansion and positive free cash flow, addressing the potential compliance issues should not be problematic and, accordingly, Mitel's B3 corporate family and probability of default ratings, B1 senior secured credit facility rating, Caa1 senior secured second-lien term loan ratings and stable outlook remain unchanged and were affirmed, the agency said.

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