Moody’s affirms Global University on tap issue

Moody's Investors Service said it affirmed Global University Systems Holding BV’s B3 corporate family rating and B3-PD probability of default rating.

Concurrently, the agency affirmed the B3 instrument rating on the £234.4 million existing senior secured notes issued Lake Bridge International plc and assigned a B3 instrument rating to the £75 million tap, issued by the same entity.

The outlook on all ratings is stable.

Net proceeds from the tap issuance will be used to fund the company's strategy to grow through four small bolt-on acquisitions.

On Aug. 18, Global University Systems acquired Arden University, a U.K. specialist online distance learning university. On Sept. 9, the company entered into a definitive agreement for the acquisition of IBAT College in Ireland, with closing expected by Oct. 7. In addition, it has identified and is currently negotiating with two additional targets of education providers in the U.K. and North America.

As a result of debt funded acquisitive growth, Moody’s said it expects gross leverage to move toward 5 times at year-end November 2016 (as adjusted by Moody's for leases). The cost to fund, implement and execute the new acquisitions in the group structure will negatively impact cash flow metrics and further highlights the execution risk of an acquisitive growth strategy.

© 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.