Moody's rates Subcom loans B1

Moody's said it assigned a first-time B1 corporate family rating and B1-PD probability of default rating to Crown Subsea Communications Holding, Inc. (Subcom).

Concurrently, Moody's also assigned a B1 rating to Subcom's proposed $450 million senior secured first-lien term loan and $100 million senior secured revolving credit facility.

Proceeds from the new issuance will be used to fund balance sheet cash as well as $400 million of restricted cash which will backstop a $400 million letter-of-credit facility. Equity capital provided by funds affiliated with Cerberus Capital will be used to fund about $32 million of associated fees and expenses in addition to the cash purchase price of Subcom.

The outlook is stable.

“The B1 corporate family rating reflects risks associated with the company's moderate financial leverage, with adjusted gross debt / EBITDA of about 3.5x based on June 30, 2018 LTM results, pro forma for the transaction and excluding certain one-time expenses,” Moody’s said in a news release.

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