Moody's upgrades TMF

Moody's Investors Service said it upgraded TMF Sapphire Bidco BV’s €950 million backed senior secured first-lien term loan and €150 million backed senior secured first-lien revolving credit facility to B1 from B2 and raised to Caa1 from Caa2 the rating on the €200 million backed senior secured second-lien term loan.

Concurrently, the agency lifted TMF Sapphire Midco BV’s corporate family rating to B2 from B3 and its probability of default rating to B2-PD from B3-PD. It also revised the outlook on both entities to stable from positive.

“The ratings upgrade reflects expectations for continued improvement in TMF's operating performance and credit metrics. The company has demonstrated meaningful resilience in operations and the ability to generate free cash flow (FCF) in the past two years. Good execution with respect to organic growth, complemented by selective bolt-on M&A, and strict cost control contributed to significant expansion in EBITDA and lower leverage, with Moody's-adjusted debt/ EBITDA (excluding overdraft) declining to 6.4x in 2021 from 8.1x in 2019.

“Leverage at close to 6.5x in 2021 is high for its B2 rating, but somewhat mitigated by the resilience of the business, with a high level of recurring revenue, and the company's good liquidity,” the agency said in a press release.

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