S&P assigns B- rating to VF Holding

S&P said it assigned a B- corporate credit rating to VF Holding Corp.

The outlook is stable.

The agency also said it affirmed the B- rating on the company's first-lien credit facilities, consisting of a $100 million revolving credit facility and $1.1 billion term loan.

The recovery ratings remain at 3, indicating 50% to 70% expected default recovery.

S&P also said it affirmed the CCC issue-level rating on the company's $500 million second-lien term loan. The recovery rating remains at 6, indicating 0 to 10% expected default recovery.

The agency also said it affirmed the B- corporate credit rating on Vertafore Inc., which it expects to soon withdraw.

As part of the acquisition of Vertafore by equity sponsors Bain Capital Private Equity and Vista Equity Partners, the company has incorporated a new domiciled parent company, VF Holding, as the borrower on its $1.1 billion first-lien term loan and $500 million privately placed second-lien term loan transaction financing.

The credit facilities previously outstanding under Vertafore have been repaid, S&P said.

The agency said it expects VF Holding's leverage to rise to 9.4x from 5x as a result of this transaction.

The company will continue to operate with leverage of more than 8x despite good organic revenue growth and a credible plan to reduce costs and materially improve profitability over the next 12 months, S&P said.

Bain Capital and Vista's industry knowledge from owning direct competitor Applied Systems also lends confidence in their ability to execute on planned cost reductions, the agency said.

The stable outlook reflects a view that VF Holding's good market position and recurring revenue base and steady price increases will result in consistent operating performance over the next 12 months, S&P said.

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