Moody’s drops Trader; rates loans B2, Caa2

Moody's Investors Service said it downgraded Trader Corp.’s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD and assigned B2 and Caa2 ratings, respectively, to the proposed first-lien credit facilities and second-lien term loan.

Moody's also withdrew the SGL rating.

The ratings on Trader's existing revolving credit facility and secured notes were affirmed and will be withdrawn when the refinance transaction closes.

The outlook is stable.

Net proceeds from a new C$510 million (dollar equivalent) first-lien term loan and a new C$200 million (dollar equivalent) second-lien term loan, together with C$914 million of equity contributed by Trader's financial sponsor, Thoma Bravo and the company's management will be used to fund the C$1.6 billion purchase of the company from Apax Partners. The new C$50 million revolver is expected to be undrawn at close.

"The ratings downgrade reflects Trader's increased leverage (adjusted Debt/EBITDA to 8x from 4.4x) post-closing of the acquisition by Thoma Bravo," Moody's assistant vice president Peter Adu said in a news release.

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