Moody's assigns B2 to Newfold notes

Moody's Investors Service said it assigned a B2 rating to Newfold Digital Holdings Group, Inc.'s planned $500 million of senior secured first-lien notes due 2028 and changed the outlook to positive from stable.

The agency concurrently affirmed all other ratings, including Newfold's B3 corporate family rating, B3-PD probability of default rating, B2 senior secured first-lien credit facility rating and Caa2 senior unsecured notes rating.

Newfold will use the proceeds to fund a $400 million distribution to shareholders with the rest used to repurchase a portion of the 6% unsecured notes due 2029.

The improved outlook is based on an expectation that Newfold will be able to grow revenue and margins will remain stable. “As a result, credit metrics will improve, and debt-to-EBITDA leverage will decline to 6.5x by the end of 2024. Moody's also expects the company will maintain good liquidity, including balanced financial policies and free cash flow-to-debt above 3% of total debt,” the agency said in a statement.

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