Moody's affirms TDS

Moody's Investors Service said it affirmed TDS Investor Corp.'s corporate family and probability-of-default ratings at B2; speculative grade liquidity rating at SGL-2; $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, 29%); €235 million senior unsecured notes due 2014, $150 million floating-rate senior unsecured notes due 2014 and $450 million fixed senior unsecured notes due 2014 at Caa1 (LGD5, 78%); and $300 million subordinated notes due 2016 and €160 million subordinated notes due 2016 at Caa1 (LGD6, 93%).

The outlook is stable.

The affirmation follows the recent announcement of phase one of a process that will result in a acquisition of Worldspan LP, one of TDS' larger global distribution system competitors.

Moody's said the immediate financial impact on TDS prior to the closing of the acquisition (which is not expected for 6 months) is fairly minimum: TDS will invest $250 million in the form of subordinated note in Worldspan, $125 million of which will be funded by TDS' own balance sheet and the other half funded by a loan from its parent company.

The proposed transaction should aid the company in solidifying its position as a key global distribution system provider, with the total global distribution system providers to reduce to three from the current four, and Worldspan's strength in the online segment, the agency said.

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