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Moody’s rates Ascend loan B1
Moody’s Investors Service said it assigned Ascend Learning LLC’s $350 million add-on to its first-lien term loan a B1 rating. Concurrently, Moody’s downgraded the company’s first-lien senior secured credit facilities, revolver and term loan, ratings to B1 from Ba3.
“The downgrade of the senior secured ratings to B1 from Ba3 reflects the increase in secured debt in the capital structure, which Moody’s expects would weaken recovery in the event of a default,” Moody’s said in a press release.
Proceeds and balance sheet cash will be used to fund a planned $390 million dividend payment to Ascend Learning’s equity sponsors as well as related expenses.
“The transaction is credit negative because it will increase leverage and cash interest expense and reduce free cash flow available for investment and debt reduction,” the agency said.
Moody’s also affirmed the company’s B3 corporate family and B3-PD probability of default ratings.
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