Moody’s trims Veeam first-lien rating

Moody’s Ratings said it lowered the first-lien senior secured debt rating of VS Buyer, LLC (Veeam Software) to B2 from B1 and assigned a B2 rating to the upsized first-lien term loan and revolving credit facilities. Concurrently, the agency affirmed Veeam’s B2 corporate family and B2-PD probability of default ratings.

The planned hike in first-lien debt to repay the outstanding junior debt (seller notes) drove the downgrade, Moody’s said.

“The refinancing, which is leverage neutral, replaces the high coupon pay-in-kind (PIK) seller notes with cash pay (but lower coupon) first-lien debt. As a result, cash flow will be moderately weakened but the company will replace a rapidly increasing debt balance due to the PIK feature on the seller notes. While Veeam has been growing at double-digit rates, the quickly increasing balance of the seller notes has been limiting the company's ability to de-lever,” Moody’s said in a press release.

The outlook is stable.

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