Moody’s rates Ramundsen loans B2, Caa2

Moody's Investors Service said it assigned a first-time corporate family rating of B3 to Ramundsen Holdings, LLC, along with a probability of default rating of B3-PD.

Moody's also said it assigned B2 (LGD 3) ratings to the first-lien credit facilities and a Caa2 (LGD 5) rating to the second-lien credit facility.

The outlook is stable.

The proceeds from the $275 million first-lien term loan, $120 million second-lien term loan and cash equity from Vista Equity Partners will be used to purchase Ramundsen, which does business as SunGard Public Sector from Fidelity National Information Services, Inc.

The proceeds will also be used to put $25 million of cash on the balance sheet and pay fees and expenses, the agency said.

There also will be a new $40 million first-lien revolving credit facility, which is expected to be undrawn at closing.

The ratings are contingent upon the closing of the Ramundsen acquisition, Moody’s said.

If the transaction does not close, all of the ratings will be withdrawn.

The ratings are constrained by the company’s high leverage of about 8.5x, small scale, modest projected revenue growth in the low single digits for 2017 and somewhat soft EBITDA margins for a software company, the agency said.

The ratings are supported by Ramundsen's good market presence with small- and medium-sized enterprise customers in the local government market, Moody’s said.

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