Moody's rates Travelport loan Caa1, lifts notes to B3

Moody's Investors Service said it assigned a Caa1 (LGD6, 92%) rating to the $1.1 billion holding company PIK loan due 2012 of Travelport LLC (formally known as TDS Investor Corp. and Travelport Inc.) and revised the ratings on the company's senior unsecured notes due 2014 to B3 (LGD5, 71%) from Caa1.

The agency also affirmed the corporate family and probability-of-default ratings at B2; $275 million revolving credit facility due 2012, $125 million synthetic letter-of-credit facility due 2013 and $2.2 billion term loan facility due 2013 at Ba3 (LGD2, 27%); and subordinated notes due 2016 at Caa1 (LGD5, 84%).

The outlook is stable.

Proceeds of the new loan will be used to finance a dividend payout to Travelport's shareholders.

The agency said Travelport's B2 corporate family rating assumes that the Worldspan LP acquisition will be consummated in the second or third quarter of 2007. Including the PIK loan, Travelport's pro forma debt-to-EBITDA ratio will be a high 7.4x without the benefit of Worldspan's cash flow. Should Travelport fail to consummate the Worldspan acquisition, Moody's said there would likely be downward pressure on Travelport's ratings unless the company is able to undergo significant debt reduction using proceeds from potential asset monetizations, including a planned initial public offering of Orbitz.

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