Moody's: TowerCo loan at Ba3

Moody's Investors Service said it has assigned a Ba3 rating to the new senior secured facility of TowerCo Finance LLC, an indirect wholly owned subsidiary of TowerCo II Holdings LLC.

According to the agency, the credit facilities consist of a $40 million four-year revolver and a $350 million six-year term loan.

The proceeds will be used to pay down the $198 million outstanding term loan maturing 2014 and the $2 million drawn on the existing $40 million revolver maturing in 2012, the agency said,.

The remaining $150 million of proceeds will be used for a special one-time dividend to the company's equity investors.

As part of the rating action, Moody's said it affirmed the company's B1 corporate family rating and the B2 probability of default rating while stating that TowerCo's B1 corporate family rating reflects the company's relatively high adjusted debt to EBITDA leverage and expected weak free cash flows over the next year, as operating cash flow is primarily used for new tower construction and selective acquisitions of land underlying existing towers and currently subject to operating leases.

S&P rates Encompass B, loan B+

Standard & Poor's said it assigned Encompass Digital Media Inc. a preliminary B corporate credit rating and its proposed $195 million senior secured credit facility, consisting of a $175 million term loan B and a $20 million revolver due 2016, a preliminary B+ rating with a 2 recovery rating, indicating the expectation for substantial recovery (70%-90%) in the event of default.

The outlook is stable.

Encompass plans to use the proceeds to fund the $120 million acquisition of Ascent Media's content distribution business, repay existing debt and cover related fees.

The ratings reflect a weak business risk profile, including high customer concentration, a narrow addressable market and a highly leveraged financial risk profile, S&P said.

The ratings also consider the company's long-term guaranteed contracts with good credit quality customers, high barriers to entry and the expectation for increased margins due to the additional scale and diversity gained from the proposed acquisition.

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