Moody’s assigns Vaco, loans B2

Moody’s Investors Service said it assigned B2 ratings to Vaco Holdings LLC and its planned $40 million senior secured revolver due 2027 and $600 million senior secured term loan due 2029. These are Moody’s first ratings for Vaco.

The issuer’s B2 corporate family rating considers its high financial leverage, with debt to EBITDA of 4.9x as of Sept. 30, pro forma for the planned transactions, the agency said.

However, “Vaco has performed well during the last year with 26% revenue growth for the 12-month period ended Sept. 30, 2021, though Moody's expects that this performance will moderate going forward given the rapid employment recovery that began following the initial Covid-19 pandemic wave in early 2020,” the agency said in a press release.

Term loan proceeds and balance sheet cash will be used to repay about $200 million of debt, pay a $380 million dividend to the company's shareholders, buy $50 million of minority interests and pay related fees & expenses. Affiliates of Olympus Partners own the company.

The outlook is stable.

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