Moody’s cuts Intermedia, rates loans B3

Moody’s Investors Service said it downgraded the ratings of Intermedia Holdings, Inc., including the corporate family rating to B3 from B2 and the probability of default rating to B3-PD from B2-PD.

The outlook is stable.

The agency assigned a B3 (LGD3) rating to the company's proposed $285 million senior secured first-lien credit facility, which consists of a $260 million seven-year term loan and a $25 million five-year revolver.

The proceeds from the secured credit facility will be used to refinance the existing first-lien and second-lien credit facilities and pay related fees and expenses.

Moody's downgraded the ratings on Intermedia's existing $215 million senior secured first-lien credit facility, which consists of a $190 million seven-year term loan and a $25 million five-year revolver, to B2 (LGD3) from B1 (LGD3), and on the company's existing second-lien term loan to Caa2 (LGD5) from Caa1 (LGD5).

The ratings on the existing secured credit facilities will be withdrawn upon repayment at transaction close.

The agency said Intermedia's corporate family rating reflects the company's high leverage, lower than expected revenue growth, increasing competitive pressures and low barriers to entry.

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