Moody’s: IPC loans B1, Caa2

Moody’s Investors Service said it assigned a B3 corporate family rating to IPC Corp., along with a B3-PD probability of default rating.

The agency also assigned a B1 (LGD 3) rating on the company’s proposed senior secured first-lien revolving credit facility and senior secured first-lien term loan facility.

Moody’s also assigned a Caa2 (LGD 5) rating to senior secured second-lien term loan.

The new debt is being raised in connection with the acquisition of IPC by funds affiliated with private equity firm Centerbridge Partners, LP for a purchase price of about $1.2 billion. Centerbridge will contribute about $300 million of new equity, Moody’s said.

The outlook is positive.

The ratings reflect IPC’s high leverage and high business risk profile, demonstrated by volatile and uncertain demand for the company’s specialized telephony products and non-recurring nature of trading turrets installation revenues, Moody’s said.

As the overall market for trading turret systems has limited growth prospects, the agency said it believes that recent sales increases only temporarily benefit the company’s credit profile.

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