Moody’s rates Output facilities B1, Caa1

Moody’s Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Output Services Group, Inc. (OSG Billing Services).

Concurrently, Moody's assigned B1 ratings to the company's proposed $15 million senior secured first-lien revolver, $230 million senior secured first-lien term loan, and $50 million delayed-draw senior secured first-lien term loan.

The agency also assigned a Caa1 rating to the proposed $65 million senior secured second-lien term loan.

The outlook is stable.

"OSG Billing Services' highly acquisitive growth strategy is aggressive given the rapid succession of acquisitions to date, its limited operating history as a combined company and the expectation that future acquisitions will largely be financed with debt," Andrew MacDonald, Moody's lead analyst for OSG, said in a news release.

"However, absent future debt-funded acquisitions, the company's recurring revenue and good margins should generate cash flows that will allow debt repayment and, along with earnings growth, drive deleveraging longer term."

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