Moody’s eyes Intertrust for downgrade

Moody's Investors Service said it placed all its ratings for Intertrust NV's on review for downgrade. Intertrust's ratings, include a Ba2 corporate family rating and Ba2 backed senior unsecured ratings of its fully-owned subsidiary Intertrust Group BV. The outlook on both entities has changed to under review from negative.

The review follows Monday’s announcement that Intertrust's management board and supervisory board recommended selling the company to Corporation Service Co., an unrated and privately owned company for a total of €1.8 billion excluding debt, the agency said. CSC has arranged underwritten financing of about €3 billion to finance the acquisition and to refinance Intertrust’s debt.

“The commitment to a net debt position of the combined group at a maximum of 6x EBITDA indicates a tolerance for leverage that is unlikely to result in upward pressure on the Ba2 rating of Intertrust. Should the net leverage of the combined group be close to 6x EBITDA, which compares to the current net debt/EBITDA target of around 3x at Intertrust stand alone, a downgrade might be considered, notwithstanding the potential benefits of the combination in terms of increased scale and diversification,” Moody’s said in a press release.

The review will focus on the completion of the agreed offer and the business risk and the financial policy implications for the combined entity. Once the deal closes, Moody's said it will withdraw Intertrust's CFR.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.