Moody's assigns B2 to Alexander Mann

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Auxey Midco Ltd. (Alexander Mann Solutions). Concurrently Moody's assigned B2 ratings to the amended £40 million backed senior secured revolving credit facility due 2026, to the £115 million backed senior secured term loan B1 due 2027, both issued by Auxey Bidco Ltd. and to the $332.5 million backed senior secured term loan B1 due 2027 issued by Alexander Mann Solutions Corp.; both issuers are fully owned subsidiaries of AMS. The outlook is positive.

"Alexander Mann Solutions has demonstrated resilient performance throughout the Covid pandemic and significantly increased its customer base in the past two years with net fee income that has doubled since 2019 and is now exceeding £500 million; the company has also delivered on geographical diversification away from the U.K. and from the financial sector while maintaining margins and retaining customers.

“We expect AMS' profitability to further improve in the next 12-18 months as a number of recent contract wins will reach full run-rate potential," said Stefano Cavalleri, a Moody’s vice president, senior analyst and lead analyst for AMS, in a press release.

However, the agency noted that AMS’ ratings are also constrained by its relatively small scale and the cyclical nature of the staffing industry.

The positive outlook reflects the view that AMS’ Moody's adjusted gross debt to EBITDA will fall below 4x and that EBITDA will expand beyond £100 million.

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