Moody's upgrades Ascend loan, rates notes Caa2

Moody's Investors Service said it affirmed the B3 corporate family rating and B3-PD probability of default rating for Ascend Learning, LLC following news of the company's proposed $300 million senior unsecured notes issuance.

Moody's also said it upgraded the company's existing first-lien senior secured credit facilities to Ba3 (LGD 2) from B2 (LGD 3) and affirmed the Caa2 (LGD 5) rating on its existing $300 million senior unsecured notes due 2025.

The agency also said it assigned a Caa2 (LGD 5) rating to the proposed $300 million senior unsecured notes due 2025.

The outlook remains stable.

The proceeds of the new senior unsecured notes, along with cash from balance sheet, will be used to fund a $400 million dividend payment to its sponsors, the agency said.

Pro forma for the new debt issuance, leverage will temporarily increase from 6.8x to 8.8x, a level considered very high for its B3 rating, Moody's said.

But the company generates strong free cash flow and maintains a very good liquidity profile, the agency said, as well as solid interest coverage.

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