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Moody’s gives Ba1 to VeriSign notes
Moody's Investors Service said it affirmed VeriSign, Inc.'s Ba2 corporate family rating, Ba2-PD probability of default rating and assigned a Ba1 rating to its proposed $450 million of senior unsecured notes.
The agency also affirmed the Ba1 rating for VeriSign's existing senior unsecured notes and its SGL-1 speculative grade liquidity rating.
The outlook is stable.
Proceeds from the new notes offering will augment VeriSign's liquidity. Moody's expects the company to use its excess cash and free cash flow primarily for share repurchases.
The increase in debt will raise VeriSign's total debt to EBITDA (Moody's adjusted) from 3.3 times a of the quarter ended March 31, 2017, to about 4 times.
The agency said it affirmed the Ba2 corporate family rating based on the expectation that VeriSign's leverage will gradually decline to the high 3 times by the end of 2018 driven by revenue growth of about 2% and modest EBITDA margin expansion.
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