Moody's assigns B3 to MicroStrategy

Moody's Investors Service said it assigned MicroStrategy Inc. a B3 corporate family rating, a B3-PD probability of default rating and an SGL-2 speculative grade liquidity rating. Concurrently, Moody's assigned a Ba3 rating to the company's planned $400 million of senior secured notes.

“The ratings largely reflect the cash flow generation of the core software business and MicroStrategy's aggressive financial policies of raising debt in order to fund the purchase of risky, unregulated digital assets. Moody's also notes that the elevated financial leverage is the result of debt financing to purchase Bitcoin assets, which are significant relative to the company's asset base,” Moody’s said in a press release.

MicroStrategy will use the proceeds to finance its purchase of Bitcoin, which the company uses as its primary treasury asset.

The outlook is stable. The outlook reflects a forecast that MicroStrategy will grow revenues and EBITDA organically in the low single-digit percent range and generate stable free cash flow of about 4-5% of gross debt over the next 12-18 months, the agency 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.