Moody’s lifts, cuts Resolute Investment facilities

Moody's Investors Service said it affirmed the Ba3 corporate family rating of Resolute Investment Managers, Inc.

The agency also upgraded Resolute Investment’s senior secured first-lien term loan and revolving credit facility ratings to Ba2 from Ba3, downgraded its senior secured second-lien term loan rating to B2 from B1 and assigned a Ba3-PD probability of default rating.

The outlooks are stable.

The actions follow the company’s announcement that it will purchase a majority interest in Shapiro Capital Management, LLC.

Resolute Investment will fund the acquisition with additional borrowing on its existing term loan facility. The company's senior secured first-lien term loan will increase by $75 million to $297 million and its senior secured second-lien term loan will increase by $25 million to $105 million.

Moody’s said the actions on the senior secured first-lien term loan, revolving credit facility and senior secured second-lien term loan result from the application of its "loss given default" (LGD) methodology to guide notching decisions for obligations issued by speculative-grade issuers. The agency used its LGD model to assign ratings to the different classes of Resolute Investment’s debt. The senior secured first-lien term loan's single notch of uplift from the corporate family rating results from the enhanced protection the subordinated loans provide to a senior creditor.

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