Moody's upgrades Vericast

Moody's Investors Service said it upgraded Vericast Corp.'s corporate family rating to Caa1 from Caa3. And raised the probability of default rating to Caa1-PD from Caa3-PD and appended a /LD designation reflecting the recent debt exchange transaction.

The agency said it considers the exchange distressed and a default under its definition. The /LD designation will be removed in a few business days.

Moody's also boosted Vericast's senior secured term loan due 2023 to Caa1 from Caa3 and affirmed the Caa1 rating on amended and extended term loan due 2026. The Caa3 rating on the $800 million senior secured note due 2022 remains unchanged and will be withdrawn following a full redemption of any remaining balance that has not been tendered. The outlook was changed to stable from negative.

“The upgrade of the corporate family rating to Caa1 from Caa3 reflects Moody's view that the company's likelihood of a default is lower following these refinancing transactions, in particular the extension of its debt maturities which will provide additional time for the company to execute on its operating improvement plans,” the agency said.

The revised outlook reflects the expectation that Vericast will conservatively manage its liquidity, generate positive free cash flows and continue its cost reductions, Moody’s said.

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