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Moody's assigns B3 to PureGym notes
Moody's Investors Service said it assigned B3 ratings to the planned £805 million equivalent five-year backed senior secured notes issuance (split into euro and sterling tranches) by Pinnacle Bidco plc's (PureGym).
The rating agency said that the company's B3 corporate family rating and B3-PD probability of default rating are unaffected by the new issuance.
Furthermore, PureGym's existing Ba3 senior secured bank credit facility rating and the existing B3 backed senior secured rating are also unaffected. The outlook is stable.
The new notes will materially increase the cost of debt service to around £80 million per annum from their current £51 million level. As a result, Moody's-adjusted pro forma EBITA/interest ratio for the LTM period ended June 30, 2023 is weak at 0.7x, down from 0.9x currently, the agency said. Higher interest payments will also worsen PureGym's substantial cash consumption, Moody’s said.
The rating agency nonetheless said it expects an improvement in key credit metrics over the next 12-18 months, driven by continued profit growth.
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