Moody’s ups Zayo loans to Ba2, rates notes Caa1

Moody's Investors Service said it affirmed the B2 corporate family rating, B2-PD probability of default rating and SGL-1 speculative grade liquidity rating of Zayo Group, LLC following its announcement of a refinancing transaction.

Zayo plans to issue $350 million of new senior unsecured notes to refinance a portion of the existing senior secured term loan. As part of this action, the agency assigned a Caa1 (LGD5) rating to the new senior unsecured notes and upgraded Zayo's existing senior secured credit facilities to Ba2 (LGD2) from Ba3 (LGD2) due to the shift in capital structure.

The outlook remains stable.

Moody’s said the ratings for the debt instruments reflect both the overall B2-PD probability of default of Zayo and individual loss given default assessments. The ratings also reflect the agency’s expectation that the company will use the full proceeds from the new notes to pay down term loan debt.

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