Moody's rates MLN loans B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating to MLN US Holdco LLC, along with a B3-PD probability of default rating and B2 ratings on the company's new senior secured revolving credit facility and senior secured first-lien term loan.

The agency also assigned a Caa2 rating to the company's new senior secured second-lien term loan.

The outlook is stable.

MLN is a newly formed acquisition vehicle by Searchlight Capital Partners, LP to acquire Mitel Networks Corp.

When the going private transaction closes, Moody's said it will withdraw all of the existing ratings on Mitel.

Moody's also said it withdraw the outlook.

The ratings are currently under review for downgrade, which was initiated in April when Mitel announced that it is being acquired by Searchlight for about $2 billion, the agency explained.

The proceeds from a new $1.02 billion first-lien term loan and new $360 million second-lien term loan, together with $700 million of common equity contributed by Searchlight, will be used to fund the purchase, Moody's said.

A new $100 million revolving credit facility is not expected to be drawn at close, the agency noted.

MLN's ratings are driven by leverage of 6.8x, declining revenue in the company's core business and execution risk associated with growing the cloud business, Moody's said.

The ratings are constrained by the company's declining revenue, vulnerability to competition from larger players and ownership by private equity, the agency said.

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