Moody’s gives System One, loans B2

Moody’s Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to OCM System One Buyer, CTB, LLC (System One). Concurrently, Moody’s gave B2 ratings to the company’s proposed $45 million senior secured first-lien revolver due 2026 and $280 million senior secured first-lien term loan due 2028. The outlook is stable. These ratings are Moody’s first for System One.

Term loan proceeds combined with new equity from Oaktree Capital Management, LP affiliates will be used to finance the acquisition of a controlling interest in the company, repay debt, and cover related fees and expenses.

“System One’s position as a provider of recurring and non-discretionary workforce solutions to a wide range of clients is a key underpinning of the credit rating,” said Moody’s Andrew MacDonald, assistant vice president and analyst, in a press release.

“While leverage is considered elevated given the size and modest margin profile of the business, Moody’s believes that the company should benefit from secular trends towards outsourcing and with a conservatively managed balance sheet will generate good liquidity to allow for debt repayment,” MacDonald said.

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