Moody’s ups Learfield, rates loans Caa1

Moody’s Investors Service said it raised Learfield Communications, LLC’s corporate family rating to Caa1 from Caa2 and assigned a Caa1 rating to the new senior secured first-lien credit facilities, including a $125 million revolving credit facility and $570 million of first-lien term loan.

Concurrent with this rating action, the agency lowered Learfield's probability of default rating to D-PD from Caa3-PD because the restructuring is considered a distressed exchange and thus a default under Moody's definition. The D-PD is a temporary assignment, and the PDR will be upgraded to Caa1-PD in a few days.

Moody’s also cut the ratings on the prior senior secured first-lien term loans downgraded to Caa3 from Caa1 driven by projected recovery values. The ratings on the previous senior secured first-lien revolver due 2023 and the second-lien term loan were affirmed at Caa1 and Ca, respectively. Moody's will withdraw the ratings on the prior debt in the near term. The outlook was changed to stable from negative.

“The rating action follows Learfield's completion of a comprehensive restructuring of its capital structure in which $986 million of the prior first-lien debt was converted to $550 million of new first-lien term loan. The $75 million second-lien term loan was also converted to $20 million of the same new first-lien term loan (one tranche of $570 million first-lien term loan due 2028). The prior first-lien and second-lien holders will also receive most of the common equity in Learfield prior to the dilution from $150 million in new equity. The $150 million equity raise will provide additional liquidity to Learfield as the company continues to recover from the pandemic,” Moody’s said in a press release.

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