Moody's cuts Casa Systems'

Moody's Investors Service said it downgraded Casa Systems, Inc.'s ratings, including the senior secured term loan due in December to Caa2 from Caa1. The agency also lowered Casa’s corporate family rating to Caa2 from Caa1 and probability of default rating to Caa3-PD from Caa1-PD.

Earlier this month, Casa reported it entered a transaction support agreement with lenders holding 60% of the term loan’s principal. As of March 31, there was $223 million outstanding. The agreement calls for the lenders to exchange their debt for the same principal amount of a new super priority term loan maturing December 2027 (or December 2025 if financial leverage is not reduced below certain thresholds as of September 2025). The new loan would rank senior to the term loan, which would only have a second lien in the collateral.

Moody’s said it considers the exchange to be a distressed debt exchange and will add an /LD designation to the company’s probability of default rating because the lenders will get less than they were originally promised.

The outlook is negative.

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