Moody's rates Evertec loans B2

Moody's Investors Service said it assigned B2 (LGD 3) ratings to the proposed new senior secured first-lien credit facilities arranged for Evertec Group, LLC, which consist of an upsized $125 million revolver, a $135 million term loan A and a $425 million term loan B.

The company's B2 corporate family rating, B3-PD probability of default rating and SGL-3 speculative grade liquidity rating are unchanged.

The outlook remains stable.

The proceeds from the new loans, along with $19 million of cash on the balance sheet, will be used to repay the company's existing term debt, Moody's said.

The ratings reflect Evertec's limited operating scale and elevated business uncertainty in Puerto Rico, which accounted for about 84% of its revenues, the agency said.

The company's financial performance improved strongly over the course of 2018, resulting from growing use of electronic payments and increased spending stemming from recovery efforts following Hurricane Maria, Moody's said.

However, emigration, declining household income and the financially stressed government of Puerto Rico could hinder the company's long-term growth prospects in its largest market, the agency explained.

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