Moody's assigns GGE BCo 1 B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to GGE BCo 1 SAS, the new parent company of Galileo Global Education Finance Sarl. GGE will become the new top company within the restricted group issuing consolidated financial statements for the Galileo group.

Concurrently, Moody's gave a B2 rating to the new €1 billion senior secured term loan due 2028 and a B2 rating to the €165 million senior secured revolving credit facility due 2027, both to be raised by GGE. The outlook is stable.

The agency also withdrew the B2 CFR and B2-PD PDR at Galileo Global Education Finance, the previous top company within the restricted group. Moody's affirmed the B2 rating on the €810 million term loan due 2026 and the Caa1 rating on the second-lien loan due 2027, both issued by Galileo. These debt instruments will be redeemed in with proceeds from the new debt issuance, and their ratings will be withdrawn upon repayment.

The refinancing proceeds will be used to repay debt of €919 million, add cash on balance sheet by €75 million; and pay €6 million in transaction fees and expenses.

"Galileo's B2 rating with stable outlook reflects its resiliency and strong operating and financial performance throughout the pandemic, as well as the expectation that these positive trends will continue over the next two to three years underpinned by strong enrolment growth, modest price increases, migration to higher margin online education, capacity expansions and new campus openings," said Vํctor Garcia Capdevila, a Moody's assistant vice president and lead analyst for GGE, in a press release.

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