Moody’s assigns B1 to Ancestry loan

Moody's Investors Service said it assigned a B1 rating to Arches Buyer Inc.'s planned $375 million backed senior secured term loan B due 2027 on the announcement of a partially debt-funded shareholder distribution. The issuer is a unit of Arches Holdings Inc. (Ancestry).

Concurrently, Moody's said it affirmed the company's backed senior secured bank credit facility, including the revolver due 2025 and term loan B due 2027, backed senior secured notes at B1, and the backed senior unsecured notes due 2028 at Caa1.

The agency said it also affirmed the B2 corporate family rating and B2-PD probability of default rating at Ancestry but revised the outlook to negative from stable.

Ancestry will use the loan and balance sheet cash to fund a $500 million distribution to shareholders and pay transaction fees and expenses.

"The change in outlook to negative from stable reflects our view that the company's sponsor-driven financial policy is taking a more aggressive tone, driven in large part by the proposed dividend recapitalization transaction that will sustain Ancestry's debt-to-EBITDA leverage above our downgrade threshold," said Oleg Markin, a Moody's analyst for Ancestry, in a press release.

The agency said it forecasts that pro forma for the dividend recapitalization, Ancestry's debt to EBITDA (Moody's adjusted) will rise to 7.3x from 6.6x as of the 12 months ended Sept. 30 and expects debt-to-EBITDA leverage will be sustained at over 7x in 2024.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.