Moody's lifts RiskMetrics to Ba3

Moody's Investors Service said it upgraded RiskMetrics Group Holdings LLC's corporate family rating to Ba3 from B1, affirmed the probability-of-default rating at B1, affirmed the company's $25 million first-lien revolver due 2013 and $300 million first-lien term loan due 2014 at Ba3 (LGD3) and changed the loss-given-default rate assigned to the loans to 33% from 34%.

This concludes the review for possible upgrade begun in January, and the outlook is stable.

On Wednesday, the company's parent holding company, RiskMetrics Group, Inc., completed an initial public offering of its common stock at a price of $17.50 per share. The net proceeds totaled $194 million, much of which was used to prepay RiskMetrics Group Holdings' $125 million second-lien term loan.

The agency said the upgrade of the corporate family rating reflects the improved credit metrics of the company post-IPO, strong revenue and profitability growth in 2007 and solid growth prospects for the medium term. The rating also benefits from the company's leading market position in the risk management and corporate governance business lines and what Moody's called an impressive business profile supported by low customer concentration and broad geographic diversification.

The ratings are constrained by the company's modest revenue base compared to other Ba-rated issuers, a short performance track record for the combined RiskMetrics/ISS entity, integration risks related to the company's acquisition strategy and the risk of new product offerings by competitors, the agency added.

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