Moody's rates Avaya loans Ba3, Caa1

Moody's Investors Service said it assigned a Ba3 (LGD3, 32%) rating to Avaya Inc.'s previously unrated $335 million senior secured ABL revolving credit facility and Caa1 (LGD5, 85%) ratings to its $700 million senior unsecured bridge loan due 2015 and $750 million senior unsecured PIK toggle bridge loan due 2015.

The B2 corporate family and probability-of-default ratings and the Ba3 (LGD3, 32%) $200 million senior secured revolving credit facility and $3.8 billion senior secured term loan were affirmed.

The outlook is stable.

The agency said the B2 corporate family rating reflects the significant leverage used to finance the buyout of Avaya by TPG Capital LLC and Silver Lake Partners in October 2007 for $8.3 billion, offset by the company's industry-leading position within the enterprise telephony market and favorable replacement trends facing the industry. The funded debt-to-EBITDA ratio as of June 30 is estimated to be more than 7 times.

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