Moody's lifts RentPath view to stable

Moody's Investors Service said it affirmed RentPath, LLC's B3 corporate family rating and probability of default at B3-PD and revised the outlook to stable from negative.

The agency also affirmed the rating on the company's $50 million revolving credit facility due in December 2019 at B2 (LGD 3), $505 million first-lien term loan due in December 2021 at B2 (LGD 3) and $170 million second-lien term loan due in December 2022 at Caa2 (LGD 5).

The outlook revision reflects the company de-levering from a ratio of debt-to-EBITDA of 8.7x in 2015 to 6.5x as of March 31, Moody's explained.

The de-levering was achieved through EBITDA growth and reduced revolver borrowings, the agency said.

Moody's said it believes significant competition in the apartment advertising market will continue to create earnings volatility, but that RentPath's leverage reduction provides additional flexibility to absorb a modest EBITDA decline within the credit metrics anticipated for the rating.

The company's ability to generate low single-digit revenue growth from its subscription services in recent quarters despite reduced marketing expense is favorable given the highly competitive environment, the agency said.

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