Moody’s assigns Baa1 to Globo notes

Moody's Investors Service said it assigned a Baa1 rating to the proposed $325 million senior unsecured notes due 2025 to be issued by Globo Comunicacao e Participacoes SA.

Proceeds will be used to replace Globo's existing $325 million 6¼% perpetual notes.

The outlook is stable.

As part of the refinancing of Globo's existing 6¼% perpetual notes, Globo will transfer to Pontis III Ltd. (not rated), a Cayman Islands-based special purpose vehicle, the option to purchase all of the outstanding Globo's $325 million perpetual notes on July 20.

At the same time, Pontis III Ltd. will issue senior secured exchangeable notes (SENs) to be mandatorily exchanged for the new Globo's $325 million senior unsecured notes due 2025. The gross proceeds of the SENs will be deposited in an escrow account pledged to the SENs trustee on behalf of the holders and will be released on the call exercise date.

The issuance is part of Globo's liability management with the objective of reducing the cost of its debt, and will not affect its leverage metrics because the proposed issuance will replace the existing $325 million perpetual notes in its entirety.

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