Moody’s trims Auction.com loans

Moody's Investors Service said it downgraded Auction.com's first-lien secured rating to B3 from B2 and affirmed the company’s B3 corporate family rating and B3-PD probability of default rating.

In the third quarter of 2021, the company raised $300 million of non-convertible senior preferred equity and $500 million of convertible junior preferred equity.

The company repaid its $110 million senior secured second-lien term loan, paid down the fully drawn $45 million revolver, funded a $500 million dividend and paid related fees and expenses. Auction.com added the remainder to the balance sheet as cash.

“The first-lien secured term loan and revolver will no longer benefit from the subordinated debt cushion that the second lien debt provided and, as a consequence, the first-lien instrument ratings are aligned with the B3 CFR,” Moody’s said in a press release.

The outlook is stable.

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