Moody's rates West loans Ba3, notes B3

Moody's Investors Service said it assigned Ba3 (LGD3, 35%) ratings to West Corp.'s proposed $300 million senior secured revolving credit facility due 2019 and $350 million delayed-draw senior secured term loan A due 2019 and a B3 (LGD5, 88%) rating to its $1 billion senior notes due 2022.

The agency also downgraded the speculative grade liquidity rating to SGL-2 from SGL-1 and affirmed the corporate family rating at B1, probability of default rating at B1-PD, $312 million senior secured term loan B due 2016 and $2.1 billion senior secured term loan B due June 2018 at Ba3 (LGD3, to 35%) and $650 million 7 7/8% senior notes due 2019 at B3 (LGD5, 88%).

The company will use the net proceeds of the notes offering to repurchase the existing 8 5/8% senior notes due 2018 and up to $200 million of the outstanding 7 7/8% senior notes due 2019. The proceeds of the new delayed-draw term loans will be used to prepay a portion of outstanding term loans and to redeem any outstanding senior notes due 2019.

The agency said West's B1 corporate family rating is characterized by its high financial leverage, modest organic growth prospects and the highly competitive operating environment and technology risks affecting the company's businesses.

The B1 rating is supported by West's good projected free cash flow (after dividend) of about 5% to total debt in the next 12 to 18 months and by its large operating scale and leading market position in the conferencing and collaboration and emergency communication service markets, Moody’s said.

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