Moody’s assigns Veregy, loans B2

Moody’s Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Veregy Consolidated, Inc.

Concurrently, Moody’s assigned B2 ratings to the company’s proposed $42.5 million senior secured first-lien revolver due 2025, $250 million senior secured first-lien term loan due 2027, and $50 million senior secured delayed draw first-lien term loan due 2027. The outlook is stable. These ratings are Moody’s first for Veregy.

“Veregy occupies a fast-growing niche segment of energy efficiency services for municipalities, schools, universities and hospitals, supported by the availability of low-interest, often tax-exempt, project financing,” said Andrew MacDonald, Moody’s lead analyst for Veregy, in a press release.

“While leverage is currently elevated and we expect future acquisitions, the company has good prospects for earnings growth supported by visibility from the existing backlog that when combined with expectations of solid cash flow used for debt repayment support deleveraging. ” MacDonald said.

Term loan proceeds with new equity from Court Square Capital Partners will be used to finance the acquisition of a controlling interest in Veregy, repay debt, cover related fee and expenses, and provide opening cash to the balance sheet.

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