Moody's gives Veonet B3, loans B2

Moody's Investors Service said it gave a first time B3 corporate family rating and a B3-PD probability of default rating to Blitz F21-433 GmbH (Veonet), the new top entity of Veonet's restricted group. Concurrently, the agency assigned B2 ratings to the planned €795 million senior secured term loan B, split into a euro- and a British pound-denominated tranche, the proposed €150 million senior secured revolving credit facility and the planned €50 million senior secured capex facility.

The B3 rating reflects Veonet’s good market position, geographic diversification and barriers to entry among other factors. However, Moody’s adjusted leverage of 8.3x, relatively short track record and the risk of debt-funded acquisitions among other risks constrain the rating, the agency said.

The term loan and €170 million of unrated second-lien notes and an equity injection from the new sponsors, Ontario Teachers' Pension Plan Board and PAI Partners, and the management, will be used to finance the acquisition of Veonet.

The outlook is stable.

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