Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

U.S. technology software

Activant Solutions Inc., B2; probability-of-default rating: B2; revolver and first-lien loan, upgraded to B1 from B2, LGD3, 33%; notes, Caa1, LGD5, 87%.

CA, Inc., Ba1; probability-of-default rating: Ba1; senior notes and convertible senior notes, Ba1, LGD4, 54%.

GXS WorldWide Inc., B2; probability-of-default rating: B2; revolver and first-lien loan, upgraded to Ba3 from B2, LGD2, 24%; second-lien term loan, upgraded to B3 from Caa1, LGD4, 66%; senior subordinated debt, upgraded to Caa1 from Caa2, LGD5, 87%.

Infor Global Solutions Holdings Ltd., B3; probability-of-default rating: B3; revolver and first-lien loan, upgraded to B1 from B2, LGD2, 25%; notes, Caa2, LGD5, 80%.

The Reynolds and Reynolds Co., Ba1; probability-of-default rating: Ba1; medium-term note program, Ba1, LGD4, 60%.

Serena Software, Inc., B2; probability-of-default rating: B2; revolver and first-lien loan, B1, LGD3, 33%; notes, Caa1, LGD5, 87%.

SS&C Technologies, Inc., B2; probability-of-default rating: B2; revolver and first-lien loan, upgraded to Ba3 from B2, LGD2, 28%; notes, Caa1, LGD5, 83%.

Syniverse Technologies, Inc., Ba3; probability-of-default rating: Ba3; revolver and first-lien loan, upgraded to Ba1 from Ba3, LGD2, 24%; notes, upgraded to B1 from B2, LGD5, 80%.

Telcordia Technologies, Inc., B1; probability-of-default rating: B1; revolver and first-lien loan, upgraded to Ba3 from B1, LGD3, 31%; notes, B3, LGD5, 86%.

UGS Corp., B2; probability-of-default rating: B2; revolver and first-lien loan, upgraded to Ba2 from B1, LGD2, 18%; senior subordinated notes, B3, LGD4, 66%; senior unsecured bonds, Caa1, LGD6, 92%.

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