Moody’s assigns Syndigo B3

Moody's Investors Service said it assigned Syndigo LLC a B3 corporate family rating and a B3-PD probability of default rating.

The agency also gave a B2 instrument rating to the proposed first-lien senior secured credit facilities, which include a $375 million term loan and a $50 million revolving facility and a Caa2 rating to the proposed $160 million second-lien senior secured credit facilities.

“Syndigo’s B3 corporate family rating reflects the company’s very high leverage at 13.2x pro forma for the transaction as of September 2020 (Moody's adjusted including capitalized software as an expense) and weak free cash flow metrics, with FCF/debt below 2%. The credit profile is constrained by the company’s narrow operating scope and relatively modest scale with approximately $140 million in GAAP revenue as of the 12 months ending September 2020,” Moody’s said in a press release.

Loan proceeds will be used to finance the acquisition and provide liquidity. Also, the private equity sponsors are contributing new equity and rolling over equity to fund a portion of the purchase price.

The outlook is stable.

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