Moody’s upgrades CSG first-lien loans

Moody’s Investors Service said it upgraded CSG Systems International Inc.’s senior secured first-lien credit facilities to Ba1.

The agency, however, affirmed CSG’s corporate family rating at Ba2 and its probability of default rating at Ba2-PD.

CSG recently sold $425 million of unsecured convertible notes. It used the proceeds fund a $90 million share repurchase, pay transaction fees and the about $34.3 million cost of related capped call derivatives that will be put in place to mitigate equity dilution, add up to $15 million of cash to the balance sheet, and repay about $275 million of revolver outstanding.

“The upgrade of the senior secured first-lien credit facilities instrument rating to Ba1 from Ba2 reflects their priority in the pro forma capital structure, ahead of the new unsecured notes (unrated), which would absorb potential losses in a default scenario,” Moody’s said in a press release.

The outlook is stable.

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