Moody's assigns Zebra Intermediate, loan Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating and a Ba2-PD probability of default rating to Zebra Intermediate II, LLC. The agency also assigned Ba2 ratings to the planned $1.24 billion seven-year first-lien term loan to be issued by Zebra Buyer, LLC to finance the acquisition as well as a $170 million revolving credit facility. Zebra Buyer, LLC, a subsidiary of Zebra, is the designated borrower.

“The Ba2 CFR is supported by Zebra's assets under management (AUM) scale, diversified asset class and product mix, solid presence in key distribution channels and strong historical investment performance. However, the rating is constrained by high leverage, which Moody's estimates will be around 4.8x debt/EBITDA on a pro forma basis, below industry average profit margins and negative organic AUM growth,” Moody’s said in a press release.

Zebra is a holding company formed to acquire Wells Fargo Asset Management from Wells Fargo & Co. by GTCR LLC and Reverence Capital for $2.1 billion, including a $956 million equity contribution.

The outlook is stable.

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