Rating Action: Moody's downgrades Output Services Group's PDR to D-PD following Chapter 11 filingGlobal Credit Research - 01 Sep 2022New York, September 01, 2022 -- Moody's Investors Service ("Moody's") downgraded Output Services Group, Inc.'s ("OSG") probability of default rating ("PDR") to D-PD from Caa2-PD following the company's announcement of its voluntary prearranged Chapter 11 proceeding. Subsequent to today's action, Moody's will withdraw all of its ratings for OSG because of the company's bankruptcy filing.Governance considerations were considered a key driver of the downgrade because of the company's voluntaary Chapter 11 filing after entering into a restructuring support agreement (RSA) with holders of over 88.7% of the first lien credit facilities debt and 100% of the second lien term loan debt.Downgrades:..Issuer: Output Services Group, Inc..... Probability of Default Rating, Downgraded to D-PD from Caa2-PDOutlook Actions:..Issuer: Output Services Group, Inc.....Outlook, Remains NegativeRATINGS RATIONALEOn August 8, 2022, OSG Group Holdings, Inc. and its subsidiaries including Output Services Group, Inc. had its voluntary prearranged Chapter 11 filing submitted to the U.S. Bankruptcy Court. The company's RSA amends the company's first lien credit facilities agreement to extend the maturity dates on the revolver and term loan to 2025 and 2026, respectively. The amendment also increased the interest rate on the first lien facilities and allows for a portion to be paid in kind ("PIK"). At the same time, the company's second lien term loan lenders agreed to an exchange of 100% of the term loan debt for a combination of approximately $44.3 million of unsecured subordinated mezzanine debt due 2027 and an equity interest in the reorganized company. As part of the restructuring, the existing second lien lenders contributed $70 million in new capital consisting of new equity and an additional $25 million in unsecured subordinated mezzanine debt. Additionally, the company's $5 million unsecured note and $21.2 million secured note to Aquiline Capital Partners were extinguished and equitized, respectively, as part of the transaction. The pro forma equity holdings including preferred equity conversion upon restructuring will be split between affiliates of Pemberton Capital Advisors (48.1%), Apogem Capital (30.4%), and Aquiline Capital Partners (21.5%).Please refer to Moody's Investor Service Policy for Withdrawal of Credit Ratings, available on its website, www.moodys.com. The principal methodology used in this rating was Business and Consumer Services published in November 2021 and available at https://ratings.moodys.com/api/rmc-documents/356424. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.Output Services Group, Inc., headquartered in Ridgefield Park, New Jersey, provides printing and mailing of customer invoices and bills, critical communications and customer engagement solutions services to multiple end markets including financial services, healthcare, education, telecom, HOA/property management and other accounts receivable management organizations in the US.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. 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