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Moody's lifts Kiwi VFS view to positive
Moody's Investors Service said it affirmed the B2 corporate family rating and B2-PD probability of default rating for Kiwi VFS SUB I Sarl.
The agency also said it affirmed the B2 ratings for the existing $39 million senior secured revolving credit facility due 2023, the $51 million guaranteed senior secured facility due 2023, the £321 million senior secured term loan B1 due 2024 and the €385 million senior secured term loan B2 due 2024.
The agency also said it withdraw the Caa1 rating to the senior secured second-lien term loan due 2025 when it is repaid.
All of the facilities are borrowed or will be borrowed by Kiwi VFS SUB II Sarl and guaranteed by Kiwi VFS SUB I.
The outlook also was changed to positive from stable.
The proceeds will be used to refinance the outstanding second-lien term loan and pay the transaction fees, Moody's said.
The outlook revision reflects the stronger-than-anticipated operating performance of Kiwi VFS despite negative headwinds in the CIS region, which management is addressing via implementing cost savings measures, the agency explained.
Moody's said it estimates leverage to be about 5.1x as of September 2018.
The proposed refinancing also is marginally credit positive because of CHF 5 million of annual interest savings, but it is mostly leverage neutral, the agency said.
The ratings also are supported by the company's market leading position with 50% share in the growing outsourced visa application services, along with the company's broad and diversified geographic presence in 141 countries, Moody's said.
The ratings are constrained by the company's high customer concentration and their underlying short-term contracts, the agency said, partially mitigated by long-term relationships and high retention rates with recent extension of the U.K. contract and renewal of the Canada contract.
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