Moody’s alters Trace3 outlook to stable

Moody’s Ratings said it changed its outlook for Trace3 (Escape Velocity Holdings, Inc.) and affirmed the B3 ratings on the company and its $415 million backed senior secured first-lien term loan due 2028, which will subsequently increase by $225 million because of the planned fungible term loan add-on.

“The change in Trace3's outlook to stable reflects the company's aggressive financial policy characterized by a $225 million incremental term loan issuance for a shareholder distribution, which will increase leverage to around 7x debt/EBITDA from about 5x as of December 2023. Moody's expects that absent any M&A, leverage will moderate to around 6.4x over the next 12 months supported by mid-single-digit revenue growth. The growth will be facilitated by a mix shift towards higher margin services and growth in emerging technology solutions,” the agency said in a statement.

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