Moody's upgrades Verra Mobility

Moody's Investors Service said it raised VM Consolidated, Inc.'s (Verra Mobility Corp.) corporate family rating to B1 from B2, its probability of default to B1-PD from B2-PD, the senior secured term loan to Ba3 from B1, and its senior unsecured notes to B3 from Caa1. The speculative grade liquidity rating remains unchanged at SGL-1.

“Today's action was driven by Moody's expectation for high single-digit revenue growth, EBITDA margins over 40%, moderate debt to EBITDA expected to be sustained below 4x, and robust free cash flow of $175 million over the next 12 months. Verra Mobility's credit metrics will trend favorably from revenue and earnings growth, driven broadly by a sustained recovery in U.S. travel volumes and from favorable secular trends towards integrating technology into traffic safety and parking in the U.S.,” the agency said in a press release.

A key consideration in the upgrade is the expectation that management will maintain the long-term leverage target at current levels along with a robust liquidity profile, Moody’s added.

The outlook remains stable.

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