Moody's rates WMG notes B1, Caa1

Moody's Investors Service said it assigned a B1 rating to WMG Acquisition Corp.'s proposed $275 million senior secured notes due 2022 and a Caa1 rating to the new $660 million senior unsecured notes due 2022.

In connection with this action, the agency lowered WMG Holdings Corp.'s corporate family rating to B2 from B1, probability of default rating to B2-PD from B1-PD and HoldCo notes to Caa1 from B3, as well as WMG Acquisition's term loan and secured notes to B1 from Ba3.

WMG Acquisition is a wholly owned subsidiary of WMG Holdings, which in turn is a wholly owned subsidiary of Warner Music Group Corp.

The outlook is stable.

Proceeds from the new notes will refinance the existing $765 million 11½% senior unsecured notes and pay around $120 million in prepayment penalty, fees and expenses. The company plans to keep the remaining proceeds of around $50 million on the balance sheet for general corporate purposes.

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