Fitch assigns Cvent B+ loans BB

Fitch Ratings said it assigned Capstone Borrower, Inc. (Cvent) a first-time long-term issuer default rating of B+. The agency also gave BB/RR2 ratings to Capstone Borrower's secured $115 million revolver and $400 million secured term loan. The outlook is stable.

The loan proceeds, additional pari passu senior secured debt, $1.25 billion of unrated preferred stock and common equity, will be used for the acquisition of Cvent Holding Corp. by Blackstone for about $4.6 billion. The acquisition was agreed upon in March 2023 and the deal is expected to close in mid-2023 subject to customary closing conditions and approvals.

“The B+ IDR for Capstone Borrower reflects Cvent's strong recurring revenues at 94%, its net dollar retention rate at 115%, and its FCF generation which should grow over the rating horizon. The rating also reflects expectations that leverage can fall over the next several quarters as EBITDA increases. As a private equity-owned company, Fitch does have concerns that the sponsor could prioritize growth via debt-funded acquisitions or shareholder returns rather than debt reduction,” the agency said in a press release.

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