Moody’s assigns Veracode, loan B2

Moody’s Investors Service said it assigned first-time ratings to Valkyr Purchaser, LLC (Veracode), including a B2 corporate family rating, a B2-PD probability of default rating and B2 ratings to the proposed $300 million senior secured first-lien term loan and $30 million revolving credit facility.

“Veracode’s B2 CFR reflects the company’s moderately high leverage of around 5x debt/EBITDA as of the LTM period ended June 30, 2020 (Moody’s adjusted on a cash EBITDA basis and excluding certain one-time expenses or 5.6x if including these expenses), small business scale and exposure to the fragmented and highly competitive application security market,” the agency said in a press release.

Term loan proceeds will be used by the company to repay Veracode’s debt.

The outlook is stable. The outlook reflects expectations for positive organic revenue growth despite the economic recession, which along with improving operating margins will keep leverage below 5x debt/EBITDA (on a cash EBITDA basis) over the next 12 to 18 months, the agency said.

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