Moody’s assigns UFC CFR B2, loans B1

Moody's Investors Service said it assigned VGD Merger Sub LLC (UFC Holdings, LLC) a B2 corporate family rating and the proposed $150 million revolver and $1.3 billion first-lien term loan a B1 (LGD3) rating.

The outlook is stable.

Proceeds will be used to help fund the acquisition of Zuffa LLC (UFC Holdings, LLC will be the rated entity following the close of the transaction) by WME Entertainment Parent, LLC (WME Parent) in partnership with Silver Lake Partners and Kohlberg Kravis Roberts & Co.

The agency expects the transaction will be funded with $1.42 billion in new equity, $325 million in rollover equity from management and existing investors, $400 million of preferred equity, $1.3 billion in new first-lien term loans and $500 million of second-lien term loans or unsecured debt.

When the company determines if the $500 million will be in the form of a second-lien term loan or an unsecured note, Moody's will assign a rating to the debt offering. While the terms are not known at the time of this publication, the agency expects that the $500 million of second-lien term loan or unsecured notes would likely be rated Caa1.

The existing ratings at Zuffa, LLC including the Ba3 corporate family rating and the Ba3 rated senior secured credit facility that is on review for downgrade, will be withdrawn upon repayment of the outstanding debt.

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