Research Update: Nexus Buyer LLC First-Lien Debt Rating Lowered To 'B-' On Incremental Borrowing; Issuer Credit Rating Affirmed

Nexus Buyer LLC (d/b/a Promontory Interfinancial Network LLC), a Washington, D.C.-based provider of FDIC-insured deposit solutions, will use $340 million of incremental first-lien borrowings to fund a $256 million dividend, repay $95 million of second-lien debt, and pay transaction expenses. Following the distribution, Promontory's S&P Global Ratings-adjusted debt to EBITDA (adjusted leverage) pro forma as of June 30, 2020 should increase to the mid-7x area, which is commensurate with the existing 'B-' issuer credit rating. Accordingly, we are affirming the issuer credit rating but lowering our issue-level rating on the first-lien credit facility to 'B-' from 'B' and revising the recovery rating to '3' from '2', to reflect the increase in first-lien debt. The '3' recovery rating reflects our expectation

...- Nexus Buyer LLC (d/b/a Promontory Interfinancial Network LLC), a Washington, D.C.-based provider of FDIC-insured deposit solutions, will use $340 million of incremental first-lien borrowings to fund a $256 million dividend, repay $95 million of second-lien debt, and pay transaction expenses. - Following the distribution, Promontory's S&P Global Ratings-adjusted debt to EBITDA (adjusted leverage) pro forma as of June 30, 2020 should increase to the mid-7x area, which is commensurate with the existing 'B-' issuer credit rating. - Accordingly, we are affirming the issuer credit rating but lowering our issue-level rating on the first-lien credit facility to 'B-' from 'B' and revising the recovery rating to '3' from '2', to reflect the increase in first-lien debt. The '3' recovery rating reflects our expectation of 50%-70% (rounded estimate: 60%) recovery in the event of a default. - The stable outlook reflects our expectation that Promontory will continue to grow organically and perform strongly....

Research Update