Moody's cuts Steinway loan, rates add-on B2

Moody's Investors Service said it assigned a B2 rating to Steinway Musical Instruments, Inc.'s $105 million add-on to its first-lien senior secured term loan.

The rating on the existing first-lien senior secured term loan was downgraded to B2 from B1.

The B2 corporate family rating and B2-PD probability of default rating were affirmed and the outlook is stable.

Proceeds from the add-on will be used to repay the second-lien term loan.

"The downgrade of Steinway's existing first-lien term loan to B2 from B1 reflects the elimination of the loss absorption provided by the second-lien term loan," Moody' senior credit officer Kevin Cassidy said in a news release.

The B2 rating on the first-lien term loan (existing and add-on) is the same as the B2 corporate family rating as this represents the majority of debt in Steinway's capital structure, the agency said.

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