Moody's assigns Cornerstone OnDemand loan B1

Moody's Investors Service said it assigned to new issuer Cornerstone OnDemand, Inc.’s proposed senior secured bank credit facilities a B1 rating. The facilities will consist of a $1.005 billion term loan and a $150 million revolver.

Loan proceeds along with about $343 million of balance sheet cash and $33 million of Cornerstone equity will be used to fund the acquisition consideration and pay transaction fees and expenses of Saba Software.

Moody also assigned the company a B2 corporate family rating, a B2-PD probability of default rating and an SGL-2 speculative grade liquidity rating. The outlook is stable.

Cornerstone had leverage of about 8x at Dec. 31. “However, when adjusting further for change in deferred revenue and stock compensation, cash adjusted leverage could be viewed as a more moderate 5x. Moody's expects Cornerstone will achieve at least $35 million in run-rate synergies over a 24-month time frame, which will bolster free cash flow generation and help reduce leverage,” the agency said in a press release.

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