Moody's rates West Corp. loans Ba3, notes Ca1

Moody's Investors Service said it assigned a B2 corporate family rating, B2 probability-of-default rating and SGL-2 speculative grade liquidity rating to West Corp., a Ba3 rating to the company's $2.35 billion senior secured credit facility (LGD3, 32%) - which includes a $2.1 billion term loan and $250 million revolver - and Caa1 ratings to the company's $650 million senior unsecured notes (LGD5, 81%) and $450 million senior subordinated notes (LGD6, 93%).

The outlook is stable.

On May 31, West entered into a definitive agreement to recapitalize by merger of Omaha Acquisition Corp. The transaction values West at $4.1 billion, including debt as of the date of the definitive agreement. The transaction is expected to close in the fourth quarter of 2006 and is subject to customary closing conditions including the approval of West's stockholders. Upon closing of this transaction, West's stock will no longer be publicly traded.

The transaction is expected to be funded with the $2.1 billion term loan, $650 million of senior unsecured notes, $450 million of senior subordinated notes, $720 million of cash equity contributed by the sponsors and $285 million of rollover equity.

Moody's said the ratings reflect substantial leverage and minimal free cash flow from operations pro forma for the recapitalization, declining pricing trends in the conferencing and communications segments, and technology risks. The ratings are supported by a large revenue base, solid operating margins, a track record of improving financial performance and long term relationships with a blue chip client base.

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