Moody's upgrades Informatica

Moody's Ratings said it upgraded the backed senior secured first-lien bank credit facilities of Informatica Inc. to Ba3 from B1. Informatica LLC issued the bank credit facilities. The agency also upgraded the corporate family rating to Ba3 from Ba1 and the probability of default rating to Ba3-PD from B1-PD. The speculative grade liquidity rating remains unchanged at SGL-1. The outlook has changed to stable from positive.

“The ratings upgrade reflects Informatica's improved operating performance driven by strong subscription ARR growth that Moody's expects to persist for the next several years. Over the next three years, Moody's projects that cloud subscription ARR growth of at least 30% will more than offset self-managed ARR and maintenance ARR declines, resulting in high-single-digit percentage revenue growth over the same period.

“Moody's expects profitability to expand over the same period contributing to free cash flow to debt increasing above 20% in 2025. Moody's expects adjusted debt to EBITDA to remain high at about 5x in 2024, though debt to EBITDA plus stock-based compensation should decline to below 3x,” the agency said in a press release.

The agency said it forecasts debt to EBITDA plus stock-based compensation and free cash flow to debt metrics will improve towards 3x and 18% over the next 12 to 18 months, respectively.

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