Moody's rates Fusion loan B3

Moody's Investors Service said Fusion Telecommunications International, Inc.'s B3 corporate family rating is unchanged following the company's revision to its transaction structure.

In connection with Fusion's announced acquisition of Birch Communications, Inc., the company recently announced several changes to the terms of the debt, which is being raised to repay existing debt at Birch, the agency explained.

Among other slight changes, the new terms include more rapid amortization, more lender-friendly covenants and a reduction of duration of each of the previously rated bank loan securities, Moody's said.

Fusion also increased the size of its B3 rated term loan B and introduced a $40 million term loan A, the agency said.

Moody's also said it assigned B3 (LGD 3) rating to the new term loan A, in line with the existing rating for the first-lien debt class.

All of the company's other ratings are unchanged, including the company's SGL-2 speculative grade liquidity rating and stable outlook, the agency said.

Moody's said it expects Fusion to benefit from continued positive organic and acquisition-related growth momentum in its existing addressable markets.

The ratings are constrained by its small scale, which limits its ability to absorb unexpected disruptions to its business, Moody's said, along with a challenging competitive environment.

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