Moody’s raises Action, rates loan Ba2

Moody's Investors Service said it upgraded Peer Holding III BV's (Action Holding BV) instrument ratings on the €3.125 billion of backed senior secured term loans B and €500 million guaranteed senior secured first-lien revolving credit facility to Ba2 from Ba3. Concurrently, Moody's assigned a Ba2 rating to the proposed $1 billion backed senior secured term loan B due in 2030, to be issued by Peer Holding III BV. 3i Group plc owns Action.

The agency also raised Action’s long-term corporate family rating to Ba2 from Ba3 and its probability of default rating to Ba2-PD from Ba3-PD and changed the outlook to stable from positive.

Action plans to borrow the new loan under its credit facilities agreement. The €933 million equivalent proceeds will be used alongside an estimated €486 million of cash to fund a shareholder distribution, through a combination of dividends and/or share buybacks of about €1.4 billion to Action's shareholders and the related transaction fees.

"Our decision to upgrade Action reflects the company's very strong operating performance in the last two years, which has been well above our initial expectations and that of retail peers," says Guillaume Leglise, a Moody's vice president, senior analyst and lead analyst for Action, in a press release.

"The upgrade also reflects Action's still moderate leverage pro forma for the proposed dividend-recap transaction and its significant size within the investment portfolio of 3i, which suggests a prudent financial policy vis-a-vis Action," Leglise added.

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