Moody's assigns B1 and Caa1 ratings to Crossmark loans

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Crossmark Holdings, Inc., B1 (LGD3, 35%) ratings to its $75 million first-lien senior secured revolving credit facility due 2017 and $310 million first-lien senior secured term loan due 2019 and a Caa1 (LGD5, 86%) rating to its $105 million second-lien senior secured term loan due 2020. The outlook is stable.

Proceeds from the debt were recently used to fund a leveraged buyout transaction under which affiliates of Warburg Pincus made a majority investment in Crossmark.

The agency said the ratings reflect Crossmark's high estimated pro forma leverage of about 6 times (Moody's adjusted), modest interest coverage (EBITDA less capex to interest of about 2 times), expectations for only modest free cash flow generation and competition from the two leading sales and marketing agencies, Acosta and Advantage Sales & Marketing.

The ratings are supported by Crossmark's business position as one of three players of size in the sales and marketing agencies industry, its scale in terms of retail locations served and direct buying points, and the relative stability of its EBITDA margins, 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.