Moody’s rates EagleView loans B2, Caa2

Moody’s Investors Service said it assigned a first-time B3 corporate family rating to EagleView Technology Corp., along with a B3-PD probability of default rating.

Moody’s also said it assigned a B2 (LGD 3) rating to the proposed first-lien credit facilities, consisting of a $240 million senior secured term loan and $20 million senior secured revolving credit facility, and Caa2 (LGD 5) rating to the new $100 million second-lien senior secured term loan.

The outlook is stable.

The proceeds from the credit facilities plus about $411 million of common equity from funds managed by private equity firm Vista Equity Partners will be used to finance the leveraged buyout of EagleView for about $715 million, Moody’s said.

The new debt instruments will be issued by a newly-formed entity named Phoenix Merger Sub, Inc. This entity will subsequently merge into EagleView, which will become the surviving issuer following transaction closing, the agency said.

The ratings reflect EagleView’s small size, high pro forma leverage, lack of meaningful international diversification, exposure to the cyclical housing market and majority ownership by a private equity sponsor, Moody’s said.

The ratings are supported by EagleView’s position as the leading provider of high resolution aerial imagery and 3D-measurement software solutions to government and commercial customers with virtually no significant competition, the agency said.

Seasonal revenue variation from government and commercial customers cause free cash flow to be weakest in the fourth fiscal quarter and strongest in the second fiscal quarter, Moody’s said.

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