Moody’s assigns SolarWinds CFR B2, loans B1

Moody's Investors Service said it assigned a B2 corporate family rating to Project Aurora Holdings, Inc. (SolarWinds) and B1 to its proposed first-lien facilities.

The holding company and debt facilities are being used to finance the going-private acquisition of SolarWinds Inc. by Thoma Bravo and SilverLake. Roughly 55% of the total transaction is being funded with equity.

The outlook is stable.

Moody’s said the B2 corporate family rating reflects SolarWinds’ very high leverage levels post-closing partially offset by the company's cash demonstrated generating capabilities and unusually strong growth prospects.

Proposed debt to trailing cash-based EBITDA (as of September 2015) exceeds 8 times but is expected to decline to well under 7 times over the next 12 to 18 months driven by a combination of cost cuts and double-digit revenue growth (GAAP closing leverage exceeds 9 times). If not for the exceptional growth prospects, the ratings would be lower.

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