Moody’s: Ascend Learning facilities B2, notes Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Alpine Finance Merger Sub LLC (Ascend Learning).

In the same action, the agency assigned B2 ratings to the company's proposed senior secured first-lien bank credit facilities including a $125 million revolver due 2022 and $700 million term loan due 2024, and a Caa2 rating to the proposed $300 million issuance of senior unsecured notes due 2025.

The outlook is stable.

In April, the company entered into a definitive agreement governing its purchase by Blackstone and Canada Pension Plan Investment Board from current owners Providence Equity Partners and Ontario Teachers' Pension Plan. The proposed leveraged buyout will be funded with proceeds from the term loan and note offering, along with $1.34 billion of equity contribution from the new sponsors.

Notwithstanding the equity component of the purchase price, the proposed transaction reflects aggressive financial policies and a significant increase in debt (up more than 60%) and ensuing financial leverage (nearly 9 times Moody's-adjusted pro forma debt-to-EBITDA, vs. 5.6 times).

"The B3 rating reflects Moody's expectation that Ascend Learning will sustain strong operating trends through 2018 as revenue grows organically in the mid-to-high single-digit percent range, and earnings benefit from price increases and volume gains, resulting in leverage declining towards the 7 times level over the next 12 to 18 months," Moody's lead analyst Natalia Gluschuk said in a news release.

© 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.