Moody’s gives B3 to Boardriders loan

Moody’s Investors Service said it assigned a B3 rating to Boardriders, Inc.’s new $431 million super senior credit agreement. Simultaneously, Moody’s affirmed the company’s Caa1 corporate family rating, Caa1-PD probability of default rating and downgraded the senior secured term loan due 2024 to Caa3 from Caa1.

Through an amended intercreditor agreement, the term loan now has a second lien on term loan collateral behind the term loans in the super senior credit agreement. The downgrade of the term loan to Caa3 reflects its lower position in the capital structure and reduced recovery prospects relative to the super senior credit facility, Moody’s said.

“The B3 assigned to the new super senior credit agreement is one notch above the Caa1 CFR, supported by the sizeable amount of junior debt in the capital structure in the form of the existing term loan and unsecured debt and other claims and its junior position relative ranking to the $170 million ABL facility,” the agency said in a press release.

As part of the transaction, Boardriders secured an amendment to its term loan that eliminated all affirmative and negative covenants, including the leverage ratio covenant, Moody’s said.

Proceeds will be used to reduce outstanding ABL revolver borrowing, pay transaction fees and expenses, and boost cash liquidity available for general corporate purposes, including business investment and restructuring expenses.

The outlook remains negative.

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