Moody’s lowers Sotheby’s untendered bonds

Moody’s Investors Service said it downgraded Sotheby’s (old) untendered senior unsecured bonds due 2025 to B3 from Ba3.

“On Sept. 10, 2019, Sotheby’s made an offer to purchase (change of control tender offer) the $400 million 4.875% senior unsecured notes due 2025 pursuant to the terms of the indenture in connection with the going private transaction that was announced in June 2019. Approximately $58 million of these bonds were not tendered and remain outstanding,” Moody’s said in a press release.

Sotheby’s lowered the amount of the term loan B by a like amount, the agency said.

“The rating on these notes (two notches below the B1 senior secured ratings) reflects their junior position to approximately $1.1 billion of senior secured notes and bank term loans as well as its $400 million senior secured revolver, pursuant to Moody’s loss-given default methodology,” the agency said.

Moody’s said Sotheby’s B1 rating and the B1 rating on its senior secured debt are unchanged.

Moody’s changed the outlook to stable from under review.

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