Moody’s rates Monotype loan B2

Moody’s Investors Service said it assigned a B2 rating to a proposed senior secured first-lien bank credit facility for Monotype Imaging Holdings Inc.

HGGC entered a pact with the company to acquire a controlling stake.

The transaction will be financed with a $50 million first-lien senior secured revolver, a $440 million first-lien term loan, an unrated $135 million second-lien term loan and $298 million of new cash equity.

“The first-lien credit facility is expected to contain covenant flexibility for transactions that could adversely affect creditors, including initial incremental facility capacity of up to $92 million, the ability to release a guarantee when a subsidiary is not wholly owned, and step downs in the asset sale prepayment requirement to 50% and 0% if the first-lien leverage ratio is equal to or less than 4.0x and 3.5x, respectively,” said Moody’s in a news release.

Moody’s also assigned a B3 corporate family rating and a B3-PD probability of default rating.

The outlook is stable.

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