Moody's might upgrade Advanstar, rates loans B1, Caa2

Moody's Investors Service said it assigned ratings to Advanstar Communications, Inc.'s new senior secured credit facilities and placed all of the ratings on review for upgrade including the company's Caa2 corporate family rating and Caa2-PD probability of default rating.

The company's $300 million first-lien term loan and $20 million first-lien revolving credit facility were given B1 (LGD3, 31%) ratings, and the $175 million second-lien term loan received a Caa2 (LGD5, 84%) rating.

Before the ratings were placed under review, the outlook was negative.

The review reflects the company's plan to raise capital to refinance all of its existing debt. In conjunction with the refinancing, ENK International Holdings, Inc. will become a wholly owned subsidiary of the company. The proceeds of the new bank debt will be combined with $95 million of new preferred equity financing from parent Advanstar Global LLC and used to repay $480 million of debt at Advanstar Communications and $73 million of debt at ENK.

Upon the completion of the transaction, Moody's expects to upgrade Advanstar's corporate family rating to B3 and to change the outlook to stable.

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