Moody’s rates Victra notes B2

Moody’s Investors Service said it assigned LSF9 Atlantis Holdings, LLC’s (Victra) new senior secured notes a B2 rating. Concurrently, Moody’s affirmed Victra’s B2 corporate family rating and B2-PD probability of default rating. The agency changed the outlook to stable from negative. No action was taken on B2 senior secured bank credit facility, which will be withdrawn following the transaction.

The rating actions consider the planned refinancing of its senior secured bank credit facility consisting of a term loan and asset-based revolving credit facility due in 2023 and 2022, respectively, with proceeds from the proposed $635 million of senior secured notes and cash from the balance sheet. A portion of the proceeds will be used to give a $90 million distribution to shareholders.

“The outlook change to stable reflects the company’s better than expected operating performance and an improvement in liquidity,” stated Charlie O’Shea, a Moody’s vice president, in a press release. “As an essential retailer, Victra kept the vast majority of its stores open during the various lockdowns, generating sales sufficient in combination with tactical expense reductions to largely mitigate any negative impact to its credit metrics,” continued O’Shea.

“We view the refinancing as a credit positive as the transaction extends maturities to 2026 and maintains the company’s access to a revolver,” O’Shea said.

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