Moody's eyes SUSE for upgrade

Moody's Investors Service said it placed on review for upgrade the B3 corporate family rating and the B3-PD probability of default rating of Marcel Lux IV Sarl (SUSE).

Concurrently, Moody's placed on review for upgrade the B2 ratings on the €300 million guaranteed senior secured term loan B2 and the $81 million guaranteed senior secured revolving credit facility borrowed by Marcel Bidco GmbH and the B2 rating on the $360 million guaranteed senior secured term loan B1 issued by Marcel Bidco LLC. Moody's will also review for upgrade the B2 ratings on the $300 million guaranteed term loan B borrowed by Marcel Lux Debtco Sarl. The outlook for the companies has been changed to ratings under review from stable.

The review follows SUSE reporting it plans to sell shares in an initial public offering. Majority shareholder EQT will lower its stake but will retain its majority ownership.

The proceeds will primarily be used to repay parts of the company's debt. “Provided for a successful IPO, we expect repayments of around $500 million mainly allocated towards the higher priced $270 million second-lien facility (unrated) and the remainder being used to repay first-lien loans. Consequently, Moody's adjusted leverage will significantly improve towards a range of 4.5x-5x based on our latest base case and we also consider the announced improvement of the financial policy,” the agency said in a press release.

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