Moody’s eyes HireRight for downgrade

Moody's Investors Service said it placed HireRight Holdings Corp.'s credit ratings under review for downgrade, including the company's B2 corporate family rating, B2-PD probability of default rating and the B2 ratings on HireRight's backed senior secured first-lien bank credit facilities issued by Genuine Financial Holdings, LLC. Previously, the outlooks were stable.

Earlier this month, HireRight announced it accepted a privatization offer from its majority shareholders, affiliates of private equity sponsors General Atlantic, LP and Stone Point Capital LLC, which triggered the review, the agency said.

A group of lenders have agreed to provide affiliates of General Atlantic and Stone Point with $250 million in debt financing.

“While details relating to the financing of this purchase have not yet been fully disclosed and HireRight's future capital structure is uncertain, Moody's anticipates that the company's pro forma LTM debt/EBITDA (Moody's adjusted) will increase by approximately 1.5x to nearly 6.5x if HireRight incurs debt to fund this transaction in its entirety, putting downward pressure on the company's credit profile,” the agency said in a statement.

The agency warned, “HireRight's ratings could be downgraded by one notch if Moody's anticipates that the company's debt to EBITDA (Moody's adjusted) will remain above 6x, free cash flow-to-debt (Moody's adjusted) will be sustained below 5%, or the company adopts increasingly aggressive financial strategies.”

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