Moody’s gives Vertafore loans B2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to VF Holding Corp., the parent of Vertafore, Inc., following the announcement of its leveraged buyout.

Concurrently, the agency assigned B2 ratings to the company's proposed $100 million first-lien revolver and $1.1 billion first-lien term loan.

The outlook is stable.

Proceeds from the term loan, a $500 million second-lien term loan (unrated) and about $1.2 billion in common equity will fund the leveraged buyout of the company by Bain Capital Private Equity and Vista Equity Partners, refinance existing debt and pay transaction fees and expenses.

"The B3 corporate family rating reflects very high debt to EBITDA of about 8.8 times resulting from the sizable amount of debt that will be used to fund the leveraged buyout of the company," Moody's analyst Todd Robinson said in a news release.

"Moody's would want to see material improvement in leverage through the realization of significant cost reduction synergies, earnings growth and some debt repayment before considering a higher rating."

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