Moody's rates Informatica loans B2, notes Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Italics Merger Sub Inc., which will be merged into Informatica Corp. Moody's also assigned B2 (LGD3) ratings to Informatica's proposed $150 million first-lien senior secured revolving credit facility and $1,875,000,000 first-lien senior secured term loan B and a Caa2 (LGD5) rating to its proposed $750 million of senior notes. The outlook is positive.

The proceeds from the new debt issuance along with about $2.5 billion of equity will be used to finance the acquisition of Informatica by a company controlled by funds advised by Permira Advisers LLC and Canada Pension Plan Investment Board for about $5.3 billion in an all-cash transaction.

The agency said the B3 corporate family rating is primarily characterized by Informatica's very high pro forma financial leverage, which Moody's expects to remain elevated over the next 12 to 24 months despite solid revenue growth prospects. The ratio of total debt to EBITDA at the close of the acquisition will be more than 9 times.

Despite its elevated financial risk profile, Informatica's strong prospective revenue growth in the high single digits, good operating scale and market-leading products in multiple adjacent data integration software markets differentiate the company relative to its similarly rated peers, Moody’s said.

The positive outlook reflects Moody's expectations for revenue growth in the high single digit percentages, with some upside if the company's new products experience fast customer adoption.

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