Moody's may downgrade Open Solutions

Moody's Investors Service said it placed Open Solutions Inc.'s ratings on review for possible downgrade, including the B2 corporate credit and probability-of-default ratings, LGD4 (50%) loss-given-default assessment, Ba3 $290 million first-lien secured term loan and revolver (LGD2, 28%) and B3 $60 million second-lien term loan (LGD4, 69%).

The agency said the review was prompted by the company's announcement that it agreed to be acquired by The Carlyle Group and Providence Equity Partners for a total transaction value of $1.3 billion including the assumption of debt. The acquisition, which has been approved by Open Solutions' board of directors, is expected to close by the first quarter of 2007 and is subject to customary approvals and consents.

Moody's review will focus on Open Solutions' ultimate capital structure, including the composition of debt and equity pro forma for the transaction, and the company's strategy under new ownership.

As a result of this proposed acquisition, the agency predicted that the company will retire the existing $290 million first-lien and $60 million second-lien term loans and that the company's unrated $144 million convertible notes will convert into the merger consideration payable to their underlying shares of common stock.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.