Moody’s cuts LSF9 loan to B1

Moody's Investors Service said it affirmed LSF9 Atlantis Holdings, LLC’s (A2Z Wireless) the B1 corporate family rating and B1-PD probability of default rating, and changed the outlook to stable from positive.

The agency also downgraded the company's first-lien secured term loan rating to B1 from Ba3.

"The change in outlook to stable reflects our view that the company's sponsor-driven financial policy is taking a more aggressive tone, driven in large part by the recently-announced $50 million debt-financed dividend, the funding of which leads to the downgrade to B1 of the term loan," Moody's vice president Charlie O'Shea said in a news release.

"This represents the second dividend since the initial ratings were issued in April 2017, totaling $125 million, and therefore indicates a potential pattern of frequent distributions."

"As with any sponsor-owned company, the risk of equity extractions is elevated, and going forward, the 'managed' leverage level will be the critical rating factor," O’Shea added in the release.

The downgrade of first-lien secured term loan rating to B1 reflects the increase in the unrated ABL, as well as increased secured debt in the capital structure relative to other junior unsecured obligations, the agency explained.

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