Moody’s lowers Mitel loans

Moody's Investors Service said it confirmed Mitel Networks Corp.’s B2 corporate family rating and B3-PD probability of default rating.

The agency also downgraded the ratings on the $50 million revolving credit facility and $660 million (face value) term loan of Mitel, with its subsidiaries, Mitel US Holdings Inc. and Mavenir Systems, Inc. as co-borrowers, to B1 from Ba3.

Moody's affirmed the SGL-2 speculative grade liquidity rating and changed the outlook to stable from rating under review.

This concludes the review for upgrade initiated on April 15, when Mitel announced the acquisition of Polycom Inc., a provider of unified communication and collaboration solutions for voice and video, in a transaction that was valued at about $2 billion.

"The ratings confirmation follows termination of the merger agreement with Polycom which would have improved Mitel's leverage, geographic and product diversity, and scale had a superior offer not surfaced," Moody's assistant vice president Peter Adu said in a news release.

"The downgrade of the ratings on the secured credit facilities reflect Moody's treatment of a portion of the UK pensions as secured rather than unsecured obligations which eliminate loss absorption capacity."

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