Moody's downgrades Vangent

Moody's Investors Service said it downgraded the corporate family and probability-of-default ratings of Vangent, Inc. to B3 from B2, its senior subordinated regular bond/debenture to Caa2 (LGD5, 83%) from Caa1 (LGD5, 79%) and senior secured bank credit facility to B1 (LGD2, 25%) from Ba3 (LGD2, 23%).

The speculative grade liquidity rating of SGL-3 was affirmed.

The outlook is negative.

Moody's said the downgrade reflects Vangent's underperformance and the agency's view that slim interest coverage and unprofitability over the ratings horizon will likely continue.

The B3 rating contemplates the possibility that as 2010 U.S. Census work ramps up and the company stabilizes its unprofitable IMSS (Mexico) contract arrangement, near term earnings could temporarily improve, the agency said.

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