Moody's rates Orbitz loans B1

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings and an SGL-2 speculative grade liquidity rating to Orbitz Worldwide, Inc. and B1 (LGD3, 40%) ratings to its proposed $600 million senior secured term loan facility due 2014, $75 million senior secured revolving credit facility due 2013 and $125 million secured synthetic letter-of-credit facility due 2013.

The outlook is stable.

The proceeds of the term loan facility, along with the proceeds from a pending public offering of Orbitz by its parent Travelport Ltd., will be used to partly repay Travelport's secured debt and to provide excess cash to Orbitz.

The agency said the B2 corporate family rating reflects the competition from supplier-owned and third-party travel sites and the majority ownership and control held by Travelport following the IPO.

Balancing these credit challenges are the company's leading position in the consumer online travel services market, modest leverage and sufficient interest coverage, Moody's said.

The facilities' B1 ratings, one notch above the corporate family rating, incorporate the debt's lien on all assets and the pledged capital stock and other equity securities, as applicable, of each subsidiary.

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