Moody’s rates Recorded Books, loans B3

Moody's Investors Service said it assigned to Recorded Books, Inc. (RBmedia) a B3 corporate family rating and a Caa1-PD probability of default rating.

The agency also assigned a B3 rating to the proposed first-lien credit facilities, consisting of a $335 million senior secured term loan and $30 million senior secured revolving credit facility.

The outlook is stable.

Proceeds from the new credit facilities together with equity contribution will be used towards Recorded Books’ acquisition by KKR and to repay the outstanding $143 million term loan.

The agency said the corporate family rating reflects the company's small size, high leverage when incorporating pre-publication expenses, its strong position in the digital audiobooks content segment and its long-term contractual relationship with a major audiobooks distributor for a material portion of its revenue.

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