Fitch ups Avaya loan, notes

Fitch Ratings said it affirmed Avaya Inc.'s B issuer rating and upgraded the senior secured first-lien term loan and notes to BB/RR1 from BB-/RR2.

“The upgrade stems from higher recovery prospects due to recent momentum with subscription and cloud-based offerings; as a result, Fitch has increased its going-concern EBITDA assumptions. Recovery for the senior secured debt also benefited from the repayment of $100 million of term loan debt in February 2021 and the reduction in the size of the senior secured ABL revolver from $300 million to $200 million in September 2020,” the agency said in a press release.

Fitch also revised the outlook to positive from stable, reflecting Avaya’s improved operating profile.

“Concerns center around the company continuing to execute on the transition to cloud-based and subscription models in support of public, private and hybrid cloud deployments amidst an intense competitive environment,” the agency said.

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