Moody’s rates Riverbed, debt Caa1

Moody's Investors Service said it assigned a Caa1 corporate family rating and Caa1-PD probability of default rating to Riverbed Holdings, Inc.

Concurrently, Moody's assigned a Caa1 debt instrument rating to Riverbed Technology Inc.'s senior secured term loan.

The agency said the action follows Riverbed's emergence from Chapter 11 bankruptcy on Dec. 7.

As part of the process, Riverbed was recapitalized with a new term loan, preferred stock, and additional cash to support the company's liquidity position.

The outlook for both companies is negative.

“Riverbed's Caa1 CFR reflects the high leverage, weak cash flow, and challenges the company continues to face in reversing revenue declines,” the agency said in a news release.

“Although Riverbed emerged from its Chapter 11 restructuring with a significantly reduced debt load, challenges offsetting the declining WAN Optimization business remain.”

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