Moody’s reviews Vertiv for upgrade

Moody’s Investors Service said it placed all ratings of Vertiv Intermediate Holding Corp. and its subsidiary Vertiv Group Corp. under review for upgrade including: the Caa1 corporate family rating, the Caa1-PD probability of default rating, the Caa3 senior unsecured debt and the Caa2 senior secured. The outlook has been changed to rating under review from negative.

GS Acquisition Holdings Corp., a Goldman Sachs backed special purpose acquisition company, plans to acquire a majority stake in Vertiv from Platinum Equity. Total cash of about $1.9 billion will be available, comprised of $690 million from GS Acquisition and an added $1.2 billion raised via a private investment in a public entity. Moody’s expects about $1.5 billion will be used to repay debt compared with Vertiv’s consolidated debt of about $3.5 billion, but which debt instruments to be repaid have yet to be determined. The remaining $400 million will go to Platinum Equity, which will still retain a 38% stake in the company, Moody’s said.

“As Vertiv will have a considerably lower debt burden going forward, Moody’s anticipates that any upgrade in the CFR would likely be limited to one or potentially two notches. Ratings of the debt classes would also likely be raised, although the levels would be determined by the final structure of Vertiv’s obligations,” said Moody’s in a press release.

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