Fitch rates Virtu notes B+

Fitch Ratings said it assigned a rating of B+ to the new $825 million five-year secured second-lien notes being issued by VFH Parent LLC, a debt-issuing subsidiary of Virtu Financial LLC in connection with the company's acquisition of KCG Holdings Inc.

The debt rating of B+ on the secured second-lien notes is one notch lower than VFH's issuer default rating and senior secured term loan ratings of BB-, reflecting the notes' subordinated position behind the senior secured term loan and higher loss severity potential under a stress scenario, Fitch explained.

VFH is a wholly-owned subsidiary of Virtu and as such, its ratings are aligned with those of Virtu and reflect the company's established market position as a technology-driven market-maker across various venues, geographies and products, the agency said.

The ratings also consider its diversified and growing revenue base, scalable business model and experienced management team, Fitch said.

VFH's ratings are constrained by elevated operational risk inherent in technology-driven trading, reliance on volatile transactional revenue and potential competitive threats arising from evolving market structures, the agency said.

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