Moody's upgrades Sabre

Moody's Investors Service said it upgraded Sabre Holdings Corp.'s corporate family rating to B1 from B2, probability of default rating to B1-PD from B2-PD and senior notes to B3 (LGD6, 94%) from Caa1 (LGD6 94%) and assigned an SGL-2 speculative grade liquidity to the company. The agency also upgraded Sabre GLBL Inc.'s senior secured credit facility to Ba3 (LGD3, 41%) from B1 (LGD3, 42%) and senior secured bonds to Ba3 (LGD3, 41%) from B1 (LGD3, 42%). The outlook remains stable.

The upgrade reflects Moody's expectation of a meaningful improvement in Sabre's cash flow generation over the next 12 to 18 months driven by revenue growth, abating use of cash in working capital resulting from changes in Travelocity's business model and lower restructuring and litigation costs.

The agency said the B1 corporate family rating reflects the company's status as one of the largest global distribution systems providers globally and the leader in the North America market and Sabre's recurring, transaction-based revenues and strong growth prospects for its airline and hospitality solutions segment and the resulting earnings diversification.

However, Sabre's global distribution systems services face challenges from alternative travel distribution models, Moody's said, and the rating also incorporates uncertainties from potential unfavorable outcomes in pending legal proceedings.

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