Fitch moves Vialto outlook to negative

Fitch Ratings said it changed its outlook for Vialto Partners to negative from stable and affirmed the B rating on Galaxy US Opco Inc., CD&R Galaxy Luxembourg Finance Sarl and CD&R Galaxy UK Intermediate 3 Ltd., collectively Vialto Partners. The agency also affirmed the BB-/RR2 ratings on the senior secured floating-rate term loan due 2029.

Vialto Partners became a newly branded entity last April after its acquisition from Pricewaterhouse Coopers (PwC) by Clayton, Dubilier & Rice.

“The transaction closed just as interest rates began a rapid climb, and Vialto now has materially higher interest expense than its original projections. Fitch has revised the outlook to negative given the company's lower interest coverage, which we expect to be below 2x for at least the next 18 months,” the agency said in a press release.

Additionally, Fitch said it estimates Vialto’s leverage (debt/EBITDA) will be above 7x at the end of this fiscal year (June 2023) but should decline below 7x next year as cost-saving initiatives take effect.

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