Moody’s rates KIRS bonds B3

Moody's Investors Service said it assigned a provisional B3 corporate family rating to KIRS Midco 3 plc, an intermediate holding company of the new KIRS group and a subsidiary of KIRS Group Ltd. Moody's also assigned a provisional Ba3 rating to the proposed £90 million backed super senior secured revolving credit facility and a provisional B3 rating to the proposed £800 million sterling equivalent backed senior secured bonds to be issued by KIRS Midco 3. The outlook is positive. Concurrently, Moody's affirmed KIRS Finco plc's B3 corporate family rating and changed its outlook to positive from negative.

The proceeds from the bonds will be used to repay existing debt obligation of KIRS Finco (previously TIG Finco Plc) and partly finance the combination of KIRS Finco, parent company of Towergate, and Nevada Investments Topco Ltd. under KIRS.

The agency said the provisional B3 corporate family rating reflects the group's strong business profile and product diversification together with good EBITDA margins and earnings growth prospects.

The rating is constrained by the high level of debt and Moody's expectation of moderate net cash flows over the coming 12 to 18 months as a result of significant near-term exceptional cash outflows, Moody’s added.

The positive outlook reflects Moody's view that, as and when the majority of run-rate saving have materialized and exceptional costs reduce, the group will be in a strong position to grow its statutory earnings, start generating good positive net cash flows and deleverage rapidly.

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