Moody’s assigns Technicolor loan, notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to both the $119.8 million senior secured term loan raised by Technicolor USA, Inc., and the €349 million of senior secured notes raised by Tech 6.

“The ratings reflect the priority claim the new money tranches will have before the current term loan and RCF lenders. Furthermore, Moody's expectation that, on completion of the ongoing debt restructuring transaction of Technicolor SA (Technicolor), scheduled to be completed on Sept. 22, 2020, the group's future corporate family rating (CFR) will transition to a strongly positioned Caa2,” Moody’s said in a press release.

The proposed restructuring is expected to lower the term loan B/RCF to €572 million from €1.23 billion at Technicolor SA. The transaction will also result in a change of the shareholder holding structure with the lenders of the original term loan B and RCF becoming shareholders of Technicolor alongside the existing shareholders.

“Technicolor's existing Caa3 CFR, Ca-PD probability of default rating (PDR) and Technicolor's existing instrument ratings remain unchanged because of the upcoming restructuring transaction, which on completion Moody's will likely consider as a distressed exchange. Upon closing, we will append the LD designation to the PDR, which will be removed after three business days,” Moody’s said.

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