Moody’s raises First Advantage, facilities

Moody's Investors Service said it upgraded STG-Fairway Acquisitions, Inc.'s (First Advantage) corporate family rating to Caa1 from Caa2 and probability of default rating to Caa1-PD from Caa2-PD.

Concurrently, the agency upgraded the company's senior secured first-lien revolving and term loan facilities to B3 from Caa1 and affirmed its senior secured second-lien term loan at Caa3.

The outlook is positive.

Moody’s said the upgrade reflects First Advantage’s return to positive topline and earnings growth beginning in the back half of 2017 driven by better-than-expected performance from North American base customers, improvements in customer attrition and revenue conversion rates, as well as productivity and automation savings.

New business bookings also ramped up in 2017 and employment growth remains healthy.

The upgrade also considers First Advantage’s continued positive free cash flow generation in 2017 and the subsequent repayment of borrowings outstanding under the revolver credit facility, the agency explained.

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