Moody’s ups ZoomInfo loans

Moody’s Investors Service said it raised the ratings on ZoomInfo LLC’s senior secured credit facility rating to Ba2 from Ba3, consisting of a $250 million revolver and an upsized $600 million term loan B, including a $200 million incremental. The agency also affirmed a $650 million senior unsecured notes rating, upsized by $300 million, issued at ZoomInfo Technologies LLC at B3. The speculative grade liquidity rating remains SGL-1.

“The upgrade of the senior secured credit facility rating to Ba2 from Ba3 reflects the increase in the proportion of junior-ranking unsecured notes relative to the secured debt in ZoomInfo's pro forma capital structure, which provide additional loss-absorption to the credit facility under Moody's loss given default (LGD) framework,” the agency said in a press release.

The proceeds from the incremental loan and the notes along with cash will be used to acquire Chorus.

Concurrently, Moody’s affirmed ZoomInfo’s B1 corporate family rating and B1-PD probability of default rating.

“The material increases in debt and financial leverage, as well as the significant multiple paid for a very small and currently unprofitable company makes this transaction a negative credit development. Further, it signals that ZoomInfo will continue to use debt and re-leverage its balance sheet to fund its future growth. Proposed incremental debt will increase ZoomInfo's debt-to-EBITDA leverage (Moody's adjusted) to around 5.4x from 3.3x as of March 31, 2021, which weakly positions the company in the B1 rating,” the agency said.

The outlook is stable.

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