Moody’s rates Vertiv CFR B2, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Vertiv Intermediate Holding Corp. and a Caa1 rating to its $600 million senior unsecured PIK notes issue.

The outlook is stable.

Concurrently, the agency affirmed the Ba3 rating on the $2.3 billion senior secured term loan and B3 rating on its $750 million unsecured notes at Cortes NP Acquisition Corp., a subsidiary of Vertiv.

Further, at closing Moody's will withdraw the B1 corporate family rating and B1-PD probability of default rating at Cortes reflecting the issuance of debt at the intermediate holdco but maintained the stable rating outlook at Cortes.

Proceeds from the new PIK notes are anticipated to fund a $500 million special dividend to equity holders and repay $100 million of existing term loan debt at Cortes, and to pay for the associated fees and expenses.

Moody’s said the Caa1 rating on the PIK notes at Vertiv, one notch below the B3 rating of the notes at Cortes, reflects their structural subordination resulting from Vertiv residing above Cortes in the capital structure and the absence of upstream guarantees from the subsidiaries.

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