Moody's lowers Mitel Networks

Moody's Investors Service said it downgraded Mitel Networks Corp.'s corporate family and probability-of-default ratings to B3 from B2, its $30 million first-lien senior secured revolving credit facility and $290 million first-lien senior secured term loan to B2 (LGD3, 36%) from B1 (LGD3, 33%) and its $130 million second-lien senior secured term loan to Caa2 (LGD5, 85%) from Caa1 (LGD5, 80%).

The outlook is stable.

The agency said Mitel has been much slower to delever subsequent to last year's acquisition of Inter-Tel (Delaware) Inc. than had been anticipated. With the general business environment having recently become even more difficult, Moody's predicted that small and medium-sized business spending on telephony services is likely to be suppressed and the company's ability to expand its cash flow stream and delever is likely to be quite limited.

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