Moody's upgrades Gogo

Moody's Investors Service said it upgraded Gogo Inc.'s corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD.

Concurrently, Moody's affirmed the B3 rating on Gogo Intermediate Holdings LLC's senior secured notes and maintained Gogo's speculative grade liquidity rating of SGL-3.

The upgrade follows Gogo’s announcement it plans to refinance its current capital structure through a new $725 million term loan and $100 million revolving credit facility, the agency said.

“Gogo will use the new term loan along with the proceeds from the sale of its commercial aviation (CA) business, which it sold for $400 million and closed in December, to repay outstanding balances under its ABL facility as well as all of its $975 million senior secured notes. At the same time, Gogo has entered into exchange agreements with holders of around $135 million of its 2022 convertible notes that have agreed to equitize their holdings early. The resulting reduction in debt quantum and, in turn, in Moody's expectations of Gogo's leverage, is a key driver of today's rating action,” the agency said in a press release.

The outlook is stable.

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