AVSC Holding Upgraded on Debt Refinancing but Outlook Remains Grim

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On December 10, 2020, S&P Global Ratings raised its issuer credit rating on AVSC Holding Corp. (PSAV Inc.) to CCC from CCC- its revolving credit facility rating to CCC from CCC- its second-lien debt rating to CC from C. The Company's recent refinancing and incremental debt capital raise is positive for near term liquidity but increases an already substantial debt burden, according to the ratings agency. On December 4, 2020, AVSC completed a refinancing of its first-lien capital structure, exchanging its former U.S. dollar first-lien term loans and senior secured notes for three classes of new first-lien term loans: a B-1 term loan of $1.2 billion, B-2 term loan totalling $511 million and a B-3 term loan totalling $563 million. The B-3 term loan includes $341 million of new debt. These loans were exchanged at par, and the new classes of first-lien term loans are pari passu. Still, the negative outlook reflects the risk that the Company's performance could be worse than S&P expects, leading to a payment default, distressed exchange, or restructuring over the next six months.

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