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Moody's gives Villa Dutch, loans B2
Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Villa Dutch Bidco BV. Concurrently, the agency gave B2 instrument ratings to the €1.02 billion senior secured first-lien term loan B, €125 million senior secured first-lien delayed-drawn term loan and €250 million senior secured multicurrency revolving credit facility. The agency also assigned a Caa1 rating to the €310 million senior secured second-lien term loan.
Villa Dutch, set up by Bain Capital, will use the loans to buy House of HR NV from Naxi Capital.
“This secondary LBO positions the company weakly in the B2 rating category due to the higher debt quantum resulting in Moody's adjusted debt/EBITDA of 6.3x at the closing of the transaction amidst a much weaker macroeconomic backdrop. House of HR has so far demonstrated strong operating performance after the pandemic and a track record of operating as a larger entity after having completed several acquisitions in the last two years. Moody's expects this strong operating performance and improvement in earnings to continue with leverage declining to 5.8x by 2023 while free cash flow (FCF)/debt is expected to be around 3% while maintaining adequate liquidity,” the agency said in a press release.
House of HR NV’s senior secured notes are expected to be refinanced with other senior secured debt and the rating action depends on the refinancing of House of HR's capital structure, the agency said.
Moody’s said it withdrew House of HR’s B2 CFR and B2-PD PDR and all instrument ratings at both House of HR and House of Finance NV. The debt ratings will be withdrawn following the closing of this transaction.
The outlook is stable.
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