Moody's rates Ascend loans

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings to Ascend Learning, LLC, B1 (LGD3, 38%) ratings to its proposed $40 million first-lien senior secured revolving credit facility due 2015 and $250 million first-lien senior secured senior loan B due 2016 and a Caa1 (LGD5, 89%) rating to its proposed $75 million second-lien senior secured term loan due 2017.

The outlook is stable.

Proceeds from the proposed bank loans will be used to refinance existing debt and fund a distribution to shareholders.

The agency said Ascend's B2 corporate family rating reflects its high pro forma leverage, modest interest coverage, relatively small scale, aggressive financial policy given the magnitude of the proposed dividend, its formation through a series of acquisitions and expectations for continued acquisitions as it seeks to expand its product offerings.

The rating is supported by the company's established position within the niche National Council Licensure Examination preparation and training market, health and vocational verticals, expectations for continued positive free cash flow generation, high operating margins, the subscription like-nature of its revenues, the diversity of its customer base and favorable fundamentals for health-care-related employment, Moody's said.

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