Halister News

(Bloomberg) -- Ratings firm expects to raise corporate grade on owner of Muzak service “over the next few days” to B-for first time since 2015 to reflect revised capital structure, which will include a new $308m secured 1st lien credit facility due in 2022, as well as 2nd lien cash-and-PIK notes.

• For now, S&P cuts MM’s corporate rating to SD (selective default) from CC to reflect completion of exchange offer on terms “tantamount to a default,” analysts led by Khaled Lahlo say in a report Thursday
• Debt exchange pushes some maturities past 2022, lowers cash interest expense by ~$18m and reduces leverage
  • Co. swaps $350m of 9.25% unsecured notes due in 2020 for 2nd lien notes plus new common shares
• S&P also lowers rating on the 9.25% notes to D from C, which were trading at 65.5 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority
  • NOTE: Swap part of a larger takeover by Apollo and GSO, in which Mood Media reincorporates in Delaware, completed late Wednesday under the Canada Business Corporations Act
  • Co. representatives did not immediately respond to requests for comment
  • Related story: Muzak’s Unpaid Royalties Roil Apollo and GSO’s Takeover Plan

To contact the reporter on this story: Molly Smith in New York at msmith604@bloomberg.net To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Rick Green, Dan Wilchins