Moody’s rates Digital Room, facilities

Moody's Investors Service said it assigned Digital Room Holdings, Inc. a corporate family rating of B3 and a probability of default rating of B3-PD.

Concurrently, the agency assigned a B2 rating to the company’s senior secured first-lien credit facilities, comprised of a $171.2 million term loan and a $25 million revolver, and a Caa2 rating to its $57.1 million second-lien term loan.

The outlook is stable.

Proceeds were used to partially fund the purchase of the issuer by H.I.G. Capital from Insight Venture Partners.

Moody’s said the B3 corporate family rating is constrained by Digital Room’s elevated debt leverage of about 7 times (Moody's adjusted for operating leases) at the end of 2017, small size, potential competitive pressures from larger commercial printers and web-based rivals, and exposure to cyclicality in the print advertising market.

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