Moody’s rates TMF facilities B2

Moody's Investors Service said it affirmed TMF Group Holding BV's B2 corporate family rating, B2-PD probability of default rating, the B1 instrument ratings on the outstanding senior secured floating-rate notes and the Caa1 instrument ratings on the outstanding senior unsecured notes.

Concurrently, the agency assigned provisional B2 (LGD3) instrument ratings to the company’s planned new €660 million equivalent first-lien term loan due 2023 and the new €90 million equivalent revolving credit facility due 2022.

The outlook is stable.

Proceeds from the new loan, together with €33.4 million of cash on balance sheet, will be used to effect full repayment of the existing notes and a €70 million revolving credit facility due 2018 (unrated).

Upon conclusion of the proposed transaction, Moody's expects to withdraw the ratings on the outstanding instruments.

Moody's positively noted that the proposed transaction will reduce annual cash interest by about €16 million on a run-rate basis while extending debt maturity to 2022 from the current 2018 when the outstanding secured floating-rate notes and revolving credit facility fall due.

Following the proposed transaction, Moody's adjusted gross leverage is expected to decrease by around 0.2 times and interest coverage ratio, the adjusted EBITA to interest expense, will improve by 0.4 times to 1.9 times (LTM pro-forma June 2016) from 1.5 times (LTM June 2016).

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