Moody's rates Midas Opco B2, notes B3

Moody's Investors Service said it assigned ratings to Midas Opco Holdings LLC (Stagwell) consisting of a B2 corporate family rating, a B2-PD probability of default rating, a B3 rating to its planned $1 billion of senior unsecured notes and an SGL-3 speculative grade liquidity rating. The outlook is positive.

Midas Opco was formed when MDC Partners Inc. merged with Stagwell Marketing Group Holdings LLC on Aug. 2. The combined company's public parent is Stagwell Inc., which trades on the Nasdaq. Concurrently, Moody's withdrew MDC's B2 CFR, B2-PD PDR and SGL-3 speculative grade liquidity rating.

Midas Opco will use the proceeds to redeem MDC's $870 million of senior unsecured notes, reduce revolver drawings and pay transaction costs. Midas Opco also put in place an unrated $500 million revolving credit facility. MDC's B3 senior unsecured notes rating and stable outlook remain unchanged and will be withdrawn when the transaction closes.

"Midas Opco's positive outlook reflects Moody's expectation that the company will maintain good operating momentum and will reduce leverage below 5x in the next 12 to 18 months," said Peter Adu, a Moody's vice president and senior analyst, in a press release.

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