Moody's rates Skillsoft loans B2

Moody's Investors Service said it assigned a first time B2 corporate family rating to SkillSoft Corp., a B3 probability of default rating to the company and B2 ratings (LGD3, 33%) to its proposed $25 million senior secured revolving credit and $200 million senior secured term loan. The loan facilities will be used to finance the acquisition of NETg, a division of Thompson Corp., for $285 million.

The outlook is stable.

The ratings reflect the significant integration issues associated with the NETg acquisition, the relatively high leverage levels of 4.0x, limited barriers to entry in the software-based training industry and potential sensitivity to an economic downturn, Moody's said.

The ratings also take into consideration the company's established position with a large and diverse customer base, high degree of near- to medium-term revenue visibility, strong free cash flow generating capabilities and the general growing presence of "e-learning" in corporate training budgets, the agency said.

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