Moody’s rates Renaissance, facilities

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

The agency also assigned a B2 rating to the company's proposed senior secured first-lien credit facilities, consisting of a $80 million revolving credit facility expiring 2023 and a $705 million term loan due 2025.

In addition, Moody's assigned Caa2 ratings to the company's proposed $335 million senior secured second-lien term loan due 2026.

Proceeds, along with common equity from the private equity firm Francisco Partners, will be used to finance the acquisition of Renaissance in a leveraged buyout transaction.

The outlook is stable.

At the close of the transaction, RL Merger Sub will be merged with and into Renaissance Holding Corp., with Renaissance Holding Corp. being the surviving entity. In addition, Moody's will withdraw all existing ratings under Renaissance Learning.

Moody’s said the B3 corporate family rating reflects Renaissance's high financial leverage (with pro forma Moody's adjusted debt-to-EBITDA of 9 times following the leveraged buyout transaction) and private equity ownership.

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