Moody's gives Chamberlain loans B2, Caa2

Moody's Investors Service said it assigned B2 ratings to the planned senior secured credit facilities of Chariot Buyer LLC (Chamberlain Group), including a $1.925 billion first-lien term loan and $250 million revolving credit facility and a Caa2 rating to the $600 million second-lien term loan. This is the first time Moody's has assigned ratings to Chamberlain Group.

Moody's gave a B3 corporate family rating and B3-PD probability of default rating to Chamberlain Group.

“Chamberlain Group's B3 CFR reflects Moody's expectation of sustained high debt leverage following the leveraged buyout by Blackstone, which will be 6.9x on a pro forma basis for the last 12 month (LTM) period ended June 30, 2021. Moody's expects leverage of about 8x by year-end 2021 and 7x by year-end 2022, which reflects more normalized operating performance following a particularly strong second half of 2020 as demand for new homes and home renovations surged following the start of the Covid-19 pandemic,” Moody’s said in a press release.

The proceeds will be used in conjunction with about $2.3 billion of cash equity from new sponsor, Blackstone, and about $400 million of existing ownership rollover equity to acquire Chamberlain Group for $5.2 billion.

The outlook is stable.

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