Moody's assigns Sterling B1

Moody's Investors Service said it assigned Sterling Check Corp. a corporate family rating at B1, a probability of default rating at B1-PD and a speculative grade liquidity rating at SGL-1. The agency also assigned a B1 rating to Sterling Infosystems, Inc.'s $140 million senior secured revolving credit facility due August 2026, upgraded Sterling Midco Holdings, Inc.'s senior secured term loan rating to B1 from B2, and withdrew Midco's B2 CFR and B2-PD PDR. The outlooks at both Sterling and Infosystems are stable.

“The assignment of a B1 CFR and B1-PD PDR to Sterling and withdrawal of the B2 CFR and B2-PD PDR at Midco, which is the initial borrower that, via a late-2017 successor borrower assumption agreement, merged into and became Infosystems, effectively represent an upgrade of the company's CFR to B1 from B2 and PDR to B1-PD from B2-PD. The term loan (maturing in 2024) originally rated at Midco is now rated at Infosystems, and the rating on the $85 million revolver at Midco will be withdrawn,” Moody’s said in a press release.

Sterling raised about $110 million through the sale of its shares in an IPO that valued the company at more than $2 billion, including the book value of debt. On Nov. 1, Sterling repaid $100 million of its term loan, cutting the balance to $512 million.

“IPO-enhanced deleveraging and public company status, including a conservative, publicly stated leverage target, point to balanced and more creditor-friendly financial strategies. Therefore, Moody's considers governance factors as a key driver of today's rating actions,” the agency said.

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