Moody’s rates Truist loans B2, Caa2

Moody’s Ratings said it assigned a B2 rating to Truist Insurance Holdings, LLC’s $4 billion seven-year senior secured first-lien term loan and a Caa2 rating to a $1.9 billion eight-year senior secured second-lien term loan being co-issued by TIH and McGriff Insurance Services, LLC. Moody's also assigned a B2 rating to a $1.175 billion five-year senior secured first-lien revolving credit facility being co-issued by TIH and McGriff. Additionally, the borrowers plan to issue $2.1 billion of other first-lien-secured debt. The outlook is stable.

Concurrently, the agency assigned TIH a B3 corporate family rating and a B3-PD probability of default rating.

The proceeds, together with new and rolled equity, will be used to fund the purchase of the remaining 80% stake in TIH by Stone Point Capital, Clayton Dubilier & Rice and co-investors from Truist Financial Corp. The parties expect to complete the deal in the second quarter of 2024, subject to regulatory approvals and other customary closing conditions.

The ratings reflect TIH’s market position as the fifth-largest U.S. insurance broker by revenue with a track record of solid organic growth, EBITDA margins and free cash flow. These credit strengths are offset by TIH's large debt burden, with an estimated pro forma debt-to-EBITDA ratio of around 8x, and execution and operational risks associated with its separation from Truist Financial Corp., Moody’s said.

TIH is expected to lower its leverage below 7.5x over the next 12-18 months through revenue growth, cost savings and repaying debt, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.