PE Debt Watch (Upgrades and Downgrades)

As usual, we have a weeks’ worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor’s Ratings Services and Moody’s Investors Service.

Company: Gray Television
Sponsor: Highland Capital
Action: S&P raised its corporate credit rating on the company to ‘B’ from ‘CCC’ and removed the company from CreditWatch.
Highlight: “Our ‘B-‘ rating reflects Gray’s very high debt leverage, minimal EBITDA coverage of interest, and the mature and cyclical nature of TV advertising. Minimal positive factors are the strong market positions of Gray’s major network-affiliated TV stations and the good geographic diversification of its station portfolio.’

Company: Serena Software Inc.
Sponsor: Harbourvest Partners LLC and Silver Lake Sumeru
Action: S&P revised its outlook on the company to stable from negative. We affirmed all ratings on the company, including the ‘B’ corporate credit rating.
Highlight: “The outlook revision reflects improvement in Serena’s credit metrics over the past six months due to stabilizing revenue trends and improved EBITDA (adjusted for stock compensation and restructuring costs) margins,” said Standard & Poor’s credit analyst Susan Madison.

Company: Allison Transmission
Sponsor: Carlyle Group
Action: Moody’s revised the company’s outlook to stable
from negative.
Highlight: “The stable outlook incorporates the expectation of continuing improvement in Allison’s credit metrics over the intermediate-term. This improvement is expected to be supported by stabilizing commercial vehicle build rates off of industry lows in 2009 and the ongoing benefits of restructuring actions taken by the company in 2009.”

View Past Downgrade and Upgrade Lists Here