Moody’s ups Sabre Holdings, rates notes Ba3

Moody's Investors Service said it upgraded Sabre Holdings Corp.’s corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD.

At the same time, the agency assigned a Ba3 rating to the proposed $530 million of senior secured notes (to be issued by Sabre's wholly owned subsidiary, Sabre GLBL Inc.), and affirmed the Ba3 rating for the company's existing senior secured credit facilities.

Moody's also upgraded the rating for Sabre's senior unsecured notes to B2 from B3.

The SGL-2 speculative grade liquidity rating was affirmed.

The outlook is stable.

Proceeds will be primarily used to redeem $480 million of senior secured notes and pay premiums.

"The upgrade reflects our view that Sabre's credit metrics will progressively strengthen from organic earnings growth and its financial profile will significantly benefit from the recently completed sale of the cash-absorptive Travelocity and lastminute.com businesses. The divestitures will allow management to focus on the remaining businesses that have good growth prospects and operating profit margins," Moody's analyst Raj Joshi said in a news release.

"Although Sabre's litigation risk has moderated it continues to remain high. The company's improved financial profile can better accommodate litigation-related costs and expenses and potential adverse outcomes from its pending legal proceedings."

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