Fitch cuts Vialto Partners

Fitch Ratings said it downgraded the long-term issuer default rating of Galaxy US Opco Inc., CD&R Galaxy Luxembourg Finance Sarl and CD&R Galaxy UK Intermediate 3 Ltd., collectively Vialto Partners, to CCC+ from B. The agency also sliced Vialto's first-lien term loan to B/RR2 from BB-/RR2.

“The downgrades reflect Fitch's expectations of sustained weakness in Vialto's EBITDA generation relative to prior estimates. FCF is forecast to be negative considering various costs, interest payments and strategic investments to capture growth opportunities. They also reflect expectations of elevated leverage and degree of execution risk surrounding the company's strategy,” the agency said in a press release.

Fitch said it expects Vialto’s leverage (debt/EBITDA) will be around 10x with only modest deleveraging as it grows EBITDA in the coming years.

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