Moody’s cuts Sierra first-lien debt

Moody's Investors Service said it affirmed Sierra Enterprises, LLC's (owner of Lyons Magnus, LLC) B2 corporate family rating and B2-PD probability of default rating.

At the same time, the agency downgraded the company's first-lien revolving credit facility and first-lien term loan debt to B2 from B1.

The outlook is stable.

Moody’s said the downgrade is solely based on a change in the mix of first- and second-lien debt, and does not reflect a deterioration in Sierra's credit quality. This follows the company's announcement that it intends to raise an incremental $15 million of first-lien debt and repay $15 million of second-lien debt.

The shift in debt mix results in Moody's expectation of a lower recovery on the first-lien debt in the event of a default, the agency explained.

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