Moody’s assigns B3 to Five Point notes

Moody's Investors Service said it assigned a B3 rating to Five Point Operating Co., LP's planned senior unsecured notes.

The B3 corporate family rating and B3-PD probability of default rating assigned to Five Point Holdings, LLC, the parent holding company of Five Point are not affected by the proposed transaction. The company's speculative grade liquidity rating remains SGL-2.

The company's notes due 2025 can be exchanged for new notes and a pro rata $100 million of cash. The notes due 2025 will be stripped of substantially all restrictive covenants and certain events of default while the new notes will have more restrictive covenants.

“Moody's views the proposed transaction as credit positive. Five Point is reducing its balance sheet debt by about 16% due to the cash component of the transaction, resulting in better leverage. Moody's projects that adjusted debt to EBITDA will be around 4.5x at year-end 2024,” the agency said in a press release.

The outlook remains stable.

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