Moody's gives Sophia loan B1

Moody's Investors Service said it assigned a B1 rating to Sophia, LP's $998 million term loan B due 2018, which replaces an existing term loan of the same size and tenor.

Sophia's other ratings, including its B3 corporate family rating as well as its stable outlook, remain unaffected.

The repricing will reduce the higher-education-software provider's interest expense by just under $5 million, to an estimated $140 million this year. Moody's noted that the estimated interest savings only minimally offsets the incremental interest burden the company took on in November, 2013, when it issued $400 million of PIK notes to make a distribution to its private equity owners (Hellman & Friedman).

As the PIK notes increased debt-to-EBITDA to about 8.5 times, the agency downgraded the ratings, including the corporate family rating, by one notch to B3.

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