Moody's upgrades Mitel, loans

Moody's Investors Service said it upgraded Mitel Networks Corp.'s corporate family rating to B2 from B3, confirmed its B3-PD probability of default rating, affirmed its SGL-2 speculative grade liquidity rating and assigned Ba3 ratings to the new revolving credit facility and term loan B of Mitel and its subsidiary, Mitel US Holdings Inc.

The ratings on Mitel and Mitel US Holdings' existing revolving credit facility and first- and second-lien term loans were also confirmed and will be withdrawn when the refinance transaction closes.

This action concludes the review for upgrade initiated on Nov. 11 when Mitel announced the acquisition of Aastra Technologies Ltd.

The outlooks are stable.

"The CFR upgrade recognizes Mitel's modest de-leveraging (pro forma adjusted Debt/EBITDA of 4x) and its enhanced scale and market position with the Aastra acquisition," Peter Adu, Moody's lead analyst for Mitel, said in a news release.

"In addition, Mitel can generate credit metrics that support the B2 rating despite our revenue decline expectations and integration costs compressing margins in the next two years."

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