Moody's alters Apex outlook to negative

Moody's Investors Service said it changed the outlook on Apex Structured Intermediate Holdings Ltd. to negative from stable and affirmed its B2 ratings. Concurrently, Moody's affirmed the B1 instrument ratings of the senior secured first-lien term loan due 2028 with tranches of $1.365 billion and $720 million, upsized by $400 million, issued by Apex Group Treasury LLC, the €745 million senior secured first-lien term loan due 2028 and the $300 million senior secured first-lien revolving credit facility due 2026 issued by Apex Group Treasury Ltd.

The proceeds of the additional $400 million debt issuance will mainly be used to finance Apex's acquisitions of Pacific Fund Systems and Boutique Collective Investments for a combined consideration of around $330 million and related transaction costs.

“The affirmation of Apex's B2 CFR and the outlook change to negative from stable reflects Moody's expectation that the group's leverage will remain above the expected range for the B2 rating for longer, with its Moody's-adjusted leverage increasing again to 8.3x, pro forma for the contemplated transaction and based on the twelve months period to 30 September 2022. At the same time, the rating action reflects Moody's view that the group still has the ability to reduce leverage towards the more appropriate level of around 6.5x by the end of 2023,” the agency said in a press release.

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