S&P assigns Apex, loans B-

S&P said it assigned B- issuer ratings to Apex Group Ltd. and its financing subsidiaries, Apex Group Treasury Ltd. and Apex Group Treasury LLC. The agency also rated Apex’s planned first-lien debt, including $1.412 billion term loans and a $200 million revolving credit facility B- issue and 3 recovery ratings. Apex also plans to secure a $275 million of second-lien debt.

“Apex's fair business risk profile is supported by the group's leading position as a global fund administrator, and recurring revenue streams from a blue-chip client base. Although it started relatively small and operates in a fragmented industry, Apex has grown rapidly since its inception in 2003, and now offers a breadth of services across its fund, financial, and corporate solutions. Furthermore, the contract structure, with about 85% of fixed fees and including inflation-linked pricing and low customer concentration (below 5%), supports the business risk profile,” S&P said in a press release.

Apex earmarked around $472 million for acquisitions with an extra $41 million for acquisition-related earnouts. The group issued U.S. dollar and euro term loans amounting to about $1.412 billion, and a pre-placed $275 million second-lien term loan to repay $1.066 billion of term loans. The remainder will be mainly used to fund acquisitions.

The outlook is stable. “The stable outlook reflects our view that Apex will continue to successfully integrate its acquisitions in the next two years, increasing its EBITDA base and generating positive free operating cash flow (FOCF) in 2022 and thereafter,” the agency said.

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