Moody’s snips Anthology

Moody’s Investors Service said it lowered Anthology’s (Astra Intermediate Holding Corp.) corporate family rating to Caa3 from B3 and its probability of default rating to Caa3-PD from B3-PD. Moody's also downgraded Astra Acquisition Corp.'s senior secured first-lien credit facility rating to Caa1 from B1. The outlook was changed to stable from negative.

“The downgrade of the CFR to Caa3 reflects Moody's view that Anthology's liquidity sources will deteriorate quickly over the next 12-24 months, increasing the likelihood of a debt restructuring, including a distressed exchange. Moody's expects Anthology will continue to grapple with a challenging integration of Blackboard, which was acquired in late 2021, including from weak revenue growth due to delays in signing contract renewals and customers transitioning to a SaaS delivery model,” the agency said in a press release.

“The downgrade also reflects governance considerations, particularly that financial strategies and risk management has grown more aggressive given the company's diminished liquidity and Moody's expectation for very high debt-to-EBITDA leverage in excess of 20 times as of June 30, 2023,” the agency added.

The improved outlook reflects the expectation of a high recovery level for the senior secured first-lien debt in default, Moody’s said.

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