Moody's assigns Skillsoft B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability rating to US Newco II (Skillsoft Corp.). Concurrently, Moody's assigned a B2 rating to the company's planned $480 million senior secured term loan and an SGL-2 speculative grade liquidity rating.

The proceeds, in addition to about $154 million of balance sheet cash, will be used to refinance $540 million of senior secured first-out and second-out bank credit facilities, $70 million of term loans, and $14 million of drawings under the company's A/R facility.

Skillsoft is now listed on the New York Stock Exchange. Upon the close of the refinancing transaction and subsequent full repayment of debt at Software Luxembourg Acquisition Sarl, Moody's expects all ratings at Software Luxembourg Acquisition to be withdrawn.

“The refinancing transaction will reduce pro forma debt by about $144 million and the associated reduction of interest expense will help improve free cash flow. The B2 CFR of Skillsoft, which is two notches higher than the Caa1 CFR of Software Luxembourg Acquisition Sarl, also reflects recent improvements in EBITDA generation and Moody's expectation for gradually increasing organic revenue growth,” the agency said in a press release.

The outlook is stable, reflecting expectations for free cash flow to gross debt in the low teens percent range and a resumption of organic revenue growth over the next 12-18 months, Moody’s said.

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