Moody’s assigns Mermaid, facility B2

Moody’s Investors Service said it assigned new ratings to Mermaid Bidco Inc. with a corporate family rating of B2 and a probability of default rating of B2-PD.

Concurrently, Moody’s assigned a B2 rating to the issuer’s proposed senior secured first-lien multi-tranche credit facility, comprised of a $300 million term loan B, a $260 million equivalent euro-denominated term loan B, and a $100 million revolver.

The rating actions follow the recently announced sale of Mermaid’s parent company Datasite Global Corp. to CapVest Partners LLP and Blackstone (as a minority shareholder) and the subsequent refinancing of initial acquisition funding. Upon completion of this transaction, Moody’s expects the debt of predecessor entity Datasite LLC to be repaid and all its ratings to be withdrawn.

The issuer rating reflects the company’s high debt-to-EBITDA (Moody’s adjusted for operating leases) of approximately 5x on a last 12-month basis (about 6x when expensing capitalized software costs), revenue concentration in the financial services segment, modest size and narrow product focus among other factors, Moody’s noted.

“The B2 ratings for Mermaid’s proposed first-lien bank debt reflect the borrower’s B2-PD PDR and a loss given default (LGD) assessment of LGD3. The B2 first-lien ratings are consistent with the CFR as the first-lien credit facility accounts for the preponderance of Mermaid’s debt structure,” the agency said in a press release.

The outlook is stable. The outlook reflects an expectation Mermaid will generate strong organic revenue and EBITDA growth over the next 12 to 18 months. “Debt-to-EBITDA (Moody’s adjusted for operating leases and capitalized software expenses) should decline moderately towards the low 5x level,” Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.