Moody's rates Informatica loans B1, Caa1

Moody's Investors Service said it assigned B1 and Caa1 ratings to Informatica LLC's proposed about $2.4 billion of first-lien credit facilities, including a $150 million revolving credit facility, and $475 million of second-lien term loans, respectively. Moody's also changed Informatica's ratings outlook to negative from stable.

The company will use the proceeds to refinance indebtedness and augment cash balances. Moody's will withdraw the ratings for Informatica's existing first-lien term loans and senior notes upon the repayment of debt at the close of refinancing.

The negative outlook reflects Informatica's decline in cash flow from operations in 2019 and very high leverage that has resulted from an increase in debt since April 2019 and erosion in EBITDA in 2019. Pro forma for the proposed refinancing and based on preliminary results for 2019, Moody's estimates Informatica's total debt to EBITDA (Moody's adjusted) is about 9x, or the low 8x when a change in deferred revenues is included in EBITDA, an increase of about 1x from a year ago.

Moody’s also affirmed the company’s B2 rating.

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