Moody's rates Smart Start loans B2, Caa2

Moody's Investors Service said it assigned Global IID Parent, LLC (Smart Start) a B3 corporate family rating, B3-PD probability of default rating and B2 ratings to the company's planned $40 million first-lien senior secured revolving credit facility and $385 million first-lien senior secured term loan. The agency also gave a Caa2 rating to the expected $80 million second-lien senior secured term loan.

“Smart Start's B3 CFR reflects the company's high financial leverage of approximately 7x (Moody's adjusted for operating lease) pro forma for the last 12 months ending Sept. 30, 2021, as well as the company's relatively small scale and narrow product offering. Additionally, the company's majority ownership by Apollo presents corporate governance concerns regarding Smart Start's financial strategies given the potential for debt-funded acquisitions and distributions,” the agency said in a press release.

The proceeds will be used in conjunction with new cash and rolled equity, mainly from Apollo Global Management, LLC to acquire Smart Start. As part of the deal, Smart Start’s debt will be repaid. Moody's will then withdraw all ratings associated with 1A Smart Start LLC, the current debt issuing entity.

The outlook is stable.

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