Moody’s cuts Springer loans, rates new loan B2

Moody's Investors Service said it downgraded the ratings on the senior secured credit facilities issued by Springer Science+Business Media Deutschland and Springer Science+Business Media GmbH to B2 from B1.

The agency also assigned a B2 (LGD3) rating to a new senior secured term loan to be issued by Springer Science+Business Media Deutschland.

Concurrently, Moody's affirmed Springer SBM One GmbH’s B2 corporate family rating and B2-PD probability of default rating.

The outlook on all ratings remains stable.

Moody’s said the actions follow the company's announcement that it will refinance a portion of its private high yield notes with proceeds from a new covenant-lite term loan of up to €420 million, which will rank pari passu with the company's existing covenant-lite senior secured debt.

The refinancing is expected to be debt and leverage metric neutral, warranting an affirmation of the corporate family rating at B2.

However, the reduction in the amount of subordinated debt in the capital structure materially lowers the cushion to absorb losses for senior secured debt holders, resulting in the downgrade of all senior secured instrument ratings to B2 from B1, the agency said.

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