Moody's rates Renaissance loans B1, Caa2

Moody's Investors Service said it assigned Renaissance Learning, Inc. a B3 corporate family rating and B3-PD probability of default rating.

Concurrently, the agency assigned B1 ratings to the company's proposed $40 million first-lien revolver and $475 million first-lien term loan and a Caa2 rating to the proposed $230 million second-lien term loan.

The outlook is stable.

Proceeds from the proposed credit facilities, along with roughly $448 million equity contribution, will be used to fund the acquisition of Renaissance by Hellman & Friedman LLC and its affiliates for $1.1 billion, refinance the company's existing debt and pay related fees and expenses.

"The acquisition by H&F increases already high financial leverage for the company," Adam McLaren, Moody's lead analyst for Renaissance Learning, said in a news release. "However, the company's products have a strong competitive position leading to our expectation for high levels of recurring revenue and continued order growth."

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