Fitch acts on GoTo Group following exchange

Fitch Ratings said it downgraded the long-term issuer default ratings of LMI Parent, LP and its subsidiary GoTo Group, Inc., formerly known as LogMeIn, Inc., to RD (restricted default) from CCC+.

The agency said the action follows the company's execution of a tender offer for nearly $2.3 billion of its $3.4 billion of debt.

GoTo Group has also made a tender offer for the remaining $882 million of first-lien debt.

Fitch said it views the executed tender offer as a distressed debt exchange because it was executed well below par and maturities were extended.

The agency said it believes GoTo Group has taken these actions to avoid an eventual probable default.

Subsequently, Fitch reassessed and upgraded the issuer default rating to CCC- and placed it on rating watch negative, reflecting that the pending tender offer heightens the probability of a rating downgrade, which Fitch would view as a distressed exchange.

Fitch assigned the new first-lien first-out revolver, term loans and note ratings of B-/RR1 and the new first-lien second-out term loan and note ratings of CCC/RR3.

Fitch said it placed the first-lien second-out term loan and notes on rating watch negative, given the likelihood of a two-notch downgrade if the second exchange is executed.

The agency downgraded the previously existing first-lien term loan and notes to C/RR6 from B-/RR3 on rating watch negative.

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