Moody’s rates Explorer B2, loans B1

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Explorer Holdings, Inc. (formerly Goldcup Merger Sub, Inc.) following the announcement of its leveraged buyout.

Goldcup Merger Sub, Inc. is an acquisition vehicle that will be merged with and into Explorer Holdings, Inc. upon closing of the transaction, with Explorer Holdings, Inc. being the surviving entity and obligor under the new capital structure.

Concurrently, the agency assigned B1 ratings to the company's proposed $45 million first-lien revolver and $495 million first-lien term loan.

The outlook is stable.

Proceeds from the term loan, a $220 million second-lien term loan (unrated) and more than $1 billion in common equity will fund the leveraged buyout of the company by Nordic Capital, refinance existing debt, and pay transaction fees and expenses.

"The B2 corporate family rating reflects the high financial leverage resulting from the sizable amount of debt that will be used to fund the leveraged buyout of the company," Moody's analyst Todd Robinson said in a news release.

"However, the company's credit profile benefits from its strong market position in the niche electronic based clinical outcome assessment market and favorable business fundamentals as the company benefits from the transfer to digital assessments."

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