Moody’s rates Vericast loan B3

Moody’s Investors Service said it gave B3 ratings to Vericast Corp.’s proposed $775 million amended and extended term loan due 2026 and $1.3 billion first-lien senior secured note. The agency also assigned a Caa3 rating to the company’s $700 million second-lien secured notes.

“The instrument ratings reflect the probability of default of the company, as reflected in the Caa1-PD probability of default rating, an average expected family recovery rate of 50% at default given the mix of first- and second-lien secured debt in the capital structure, and the particular instruments’ ranking in the capital structure. The proposed $1.3 billion first-lien senior secured note due 2026 and the amended and extended $775 million first-lien secured term loan due 2026 are rated B3 and reflect loss absorption in a distress scenario from the second-lien term loan. Both the $775 million first-lien term loan and the $1.3 billion secured note are ranked above the $700 million second lien note, resulting in a one-notch uplift from the CFR under the proposed capital structure,” Moody’s said in a press release.

The proceeds will be used to repay debt, including the $800 million of secured notes due August 2022 and the first-lien term loan due November 2023, with a springing maturity in May 2022, that had $1.434 billion outstanding at year-end 2020. The term loan and the $800 million secured note ratings will be withdrawn once repaid.

The outlook remains stable.

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