Moody's cuts RBS loans & notes; rates loan B2

Moody's Investors Service said it assigned a B2 Rating to RBS Global, Inc.'s new $1.9 billion first-lien term loan and affirmed the B2 corporate family and B2-PD probability of default ratings.

Additionally, the agency downgraded RBS' $265 million revolving credit facility to B2 from Ba2 and its $2 million 8 7/8% senior notes due 2016 to Caa1 from B3.

Moody's said the B2 rating on the company's proposed $1.9 billion term loan, at the corporate family rating level, reflects the high proportion of first-lien debt in the capital structure pro forma for the refinancing after the company's $1.1 billion 8½% senior unsecured notes.

Similarly, the downgrade of the company's first-lien revolver to B2 from Ba2 reflects the view that with the elimination of the senior notes the amount of debt that is in a first loss position before the first-lien will be relatively small.

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