Moody’s rates eircom Finco loan B2

Moody's Investors Service said it assigned a B2 rating, LGD-3, to the new term loan B5 tranche of the existing senior secured credit facility raised by eircom Finco Sarl, a wholly owned subsidiary of eircom Holdings (Ireland) Ltd.

All other eircom ratings remain unchanged, including the B2 corporate family rating, B2-PD probability of default rating and existing instrument ratings.

The outlook remains positive.

eircom is refinancing its existing €1,662,000,000 term loan B4 with a new term facility B5. This refinancing exercise will reduce the coupon to 4% from 4˝%, which will lead to a decline in interest costs by over €8 million, modestly improving interest coverage ratios and free cash flow generation, a credit positive, the agency said.

Nevertheless, this refinancing exercise is leverage neutral and does not have an impact on eircom's ratings.

Moody’s said the transaction follows previous refinancing exercises, which have enabled the company to improve its financial flexibility by simplifying the company's capital structure, including the extension of debt maturities to 2022, improving its covenant headroom and diversifying its funding sources through the issuance of €700 million senior secured notes last June.

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