Fitch shifts Anthology view to negative

Fitch Ratings said it changed the outlook to negative from stable and affirmed Astra Acquisition Corp.'s (Anthology) long-term issuer default rating at B. The agency also affirmed the BB-/RR2 ratings for the secured revolving credit facility and first-lien term loan, and CCC+/RR6 for the $110 million second-lien term loan.

Anthology's plans to acquire Blackboard for $1.9 billion. To fund the transaction, Anthology will issue a $1.3 billion first-lien term loan, which Fitch assigned BB-/RR2 ratings, and an unrated $500 million second-lien term loan.

The company also plans to obtain a $140 million first-lien secured revolver, given BB-RR2 ratings. The owner of Blackboard Providence will keep $370 million of equity in the combined company and Veritas and co-investors will contribute $387 million.

“Previously, Fitch forecast leverage to be approximately 7x at the end of FY21 and now expects it to be materially above this. Leverage will remain high in FY22 as a result of the acquisition, and, on a pro forma basis, Fitch forecasts leverage to be over 8x. FFO fixed coverage is now expected to be much weaker than Fitch forecast and is likely to be well below 1.5x for FY21,” the agency said in a press release.

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