Moody’s assigns OneDigital, loans B3

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to OneDigital Borrower LLC following the company's announcement of plans to refinance its credit facilities as part of a recapitalization.

Concurrently, Moody's assigned a B3 rating to OneDigital's new senior secured term loan, revolving credit facility and delayed draw term loan.

“Following the transaction, Moody's estimates that OneDigital will have a pro forma debt-to-EBITDA ratio well above 7x, but the rating agency expects this ratio to decline significantly in the next few quarters. OneDigital's (EBITDA - capex) interest coverage will be about 2x, and its free-cash-flow-to-debt ratio will be in the low single digits,” Moody’s said in a press release.

OneDigital will use net proceeds from the term loan plus equity to finance the recapitalization, including repayment of existing debt and payment of related fees and expenses.

Upon closing the recapitalization, Onex Corp. and its affiliated funds will have a majority stake in the newly recapitalized entity.

The outlook is stable.

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