Moody’s gives Plusgrade, loans B2

Moody's Investors Service said it assigned B2 ratings to the planned senior secured first-lien bank credit facilities to be issued by Plusgrade Inc.'s parent company, 1000732905 Ontario Inc., which will consist of a $420 million senior secured first-lien term loan B maturing 2031 and an $80 million senior secured first-lien revolver expiring 2029. Plusgrade and Points.com Inc. are co-borrowers of the credit facilities.

The agency also gave Plusgrade a B2 corporate family rating and a B2-PD probability of default rating. The outlook is stable.

“The B2 CFR reflects Plusgrade's small scale, high pro forma debt to EBITDA leverage Moody's estimates will be in the low 5x range on a Moody's adjusted basis. and its customer concentration reflective of the credit rating. The company's reliance on the global travel industry leaves it vulnerable to economic shocks, though its partners are typically more reliant on Plusgrade's products during downturns to maximize their revenue and cash flows,” the agency said in a press release.

The term loan along with new cash equity from General Atlantic and rollover equity from Caisse de depot et placement du Quebec will be invested in Plusgrade, refinance debt and pay fees and expenses related to the transaction.

“The stable outlooks reflect Moody's expectations of at least high-single-digit percentage revenue growth and stable EBITDA margins over the next 12 months while Plusgrade maintains at least good liquidity,” the agency said.

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