Moody’s rates AlixPartners facilities B2

Moody's Investors Service said it affirmed AlixPartners, LLP's B2 corporate family rating and B2-PD probability of default rating.

At the same time, the agency assigned a B2 rating to the company's proposed first-lien senior secured credit facilities, consisting of a $1.37 billion term loan due 2024 and a $75 million revolving credit facility expiring in 2022.

The outlook remains stable.

AlixPartners plans to use the proceeds from the first-lien term loan and cash on hand to refinance its existing $1.1 billion first-lien term loan due 2022 and to fund a $285 million distribution to shareholders.

Moody’s said the proposed transaction is credit negative and reflects the company's aggressive financial policies demonstrated by its frequent debt-funded shareholder distributions that raise leverage and consume free cash flow. AlixPartners' pro forma debt to EBITDA (inclusive of Moody's standard adjustments) rises to about 6.2 times from 5.2 times estimated at Dec. 31, while EBITDA less capex to interest declines to about 2.6 times from 3.1 times.

The B2 rating on first-lien term loan and revolving credit facilities, at the same level with the corporate family rating, reflects the capital structure that is entirely composed of this class of debt, the agency explained.

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