Moody’s rates MDC Partners notes B3

Moody's Investors Service said it assigned a B3 rating to MDC Partners Inc.'s proposed $800 million eight-year senior unsecured note.

The corporate family rating is unchanged a B2 and the outlook is stable.

Proceeds are expected to be used to refinance the existing $735 million senior note due 2020, pay the call premium and expenses as well as provide about $22 million for general corporate purposes.

The B3 rating on the existing $735 million note will withdrawn upon repayment.

The proposed transaction is expected to increase leverage to 6.8 times from 6.5 times (including deferred acquisition consideration and minority interest puts as debt, but excluding lease adjustments) as of Q4 2015 due to the $65 million increase in debt. However, deferred acquisition consideration payments due in 2016 and EBITDA growth are expected to lead to a reduction in leverage to the mid 5 times range by the end of 2016 absent any new acquisitions.

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