Moody’s: Output Services unchanged by loan add-on

Moody's Investors Service said that Output Services Group, Inc.'s proposed $50 million add-on to its first-lien term loan to fund a series of tuck-in acquisitions is credit negative but does not immediately impact the company's B2 corporate family rating or stable outlook.

The company is also seeking a new $50 million delayed-draw first-lien term loan to fund future acquisitions and is asking to loosen total leverage covenants governing future incremental borrowing limits to 5.75 times from 5.5 times, among other changes.

With the proposed $50 million add-on and the full drawing of a previously funded $50 million delayed-draw term loan stemming from the company's March refinancing, the first-lien term loan will increase to nearly $342 million from $242 million on a pro forma basis at June 30, the agency said.

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