Moody’s rates First Advantage loans B1, Caa1

Moody’s Investors Service said it assigned a B1 rating to First Advantage’s proposed $695 million senior secured first-lien credit facility (including $75 million revolver and $620 million term loan) and a Caa1 rating to the proposed $195 million senior secured second-lien term loan. The outlook is stable.

Proceeds along with a contribution of new common equity from Silver Lake Partners and rollover equity from management will fund the leveraged buyout of First Advantage from Symphony Technology Group, refinance debt and pay transaction fees and expenses. The proposed $75 million revolver is expected to be undrawn at closing.

Moody’s also assigned First Advantage a B2 corporate family rating and B2-PD probability of default rating. Moody’s estimates pro forma debt-to-EBITDA for the LBO transaction of around 7.2 times as of December 31, (Moody’s adjusted and expensing all capitalized software costs), which positions the company weakly in the B2 rating category, the agency said.

The ratings of predecessor company STG-Fairway Acquisitions, Inc. including the B2 CFR and instrument ratings, will be withdrawn upon closing of the transaction and repayment of existing debt.

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