Moody’s turns Vialto outlook to negative

Moody’s Investors Service said it revised the outlook for CD&R Galaxy UK Intermediate 3 Ltd. (Vialto Partners) to negative from stable and affirmed the B3 ratings on the company and its senior secured first-lien bank credit facilities of its Galaxy US Opco Inc. subsidiary, consisting of a $962 million term loan due April 2029 and a $200 million revolver due April 2027.

“The outlook revision to negative from stable takes into account Vialto Partners' weak financial performance, which has trailed Moody's expectations since the company's carveout from former parent PricewaterhouseCoopers (PwC) on 29 April 2022. Additional concerns stem from Moody's expectation of continued deterioration in the company's liquidity profile amidst the current protracted high-interest rate environment,” the agency said in a press release.

Moody’s noted Vialto’s debt to EBITDA of about 10x (Moody's adjusted) for the 12 months ended Sept. 30.

The agency said it projects Vialto to continue suffering negative free cash flow over the next 12-15 months, albeit at a less pronounced pace than in FY23, resulting in declining liquidity.

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