Cross Monetary Corp. — Moody’s charges Cross Monetary’s repriced and elevated time period mortgage B2

background picture

Ranking Motion:

Moody’s charges Cross Monetary’s repriced and elevated

time period mortgage B2

8 March 2021

Firm including $100 million senior secured time period mortgage, elevating complete time period mortgage borrowings to $450

million

New York, March 8, 2021 – Moody’s Traders Service has assigned a B2 ranking to a repriced $450

million (together with pending $100 million enhance) first-lien senior secured time period mortgage being issued by

Cross Monetary Corp. (Cross Monetary). The corporate plans to make use of internet proceeds together with current

money to repurchase shares from sure fairness holders, fund near-term acquisitions and pay associated

charges and bills. The corporate can be upsizing its revolving credit score facility to $80 million (rated B2).

The ranking outlook for Cross Monetary is unchanged at secure.
RATINGS RATIONALE
Based on Moody’s, Cross Monetary’s rankings mirror its good regional market presence in small

and center market insurance coverage brokerage significantly in Maine, Massachusetts and New Hampshire.

The corporate has good diversification throughout purchasers, consumer industries, producers, and insurance coverage

carriers primarily for P&C merchandise with some worker advantages. Cross Monetary additionally has a observe

report of wholesome EBITDA margins and money move.
These strengths are offset by elevated monetary leverage put up transaction, modest curiosity protection,

and a geographic focus the place the highest three states account for practically 80% of complete income.

Cross Monetary’s revenues and earnings are topic to fluctuations within the financial and regulatory

situations of the northeast US, particularly Maine and Massachusetts. Different challenges embody the

firm’s restricted scale relative to different rated insurance coverage brokers in addition to potential liabilities arising

from errors and omissions, a danger inherent in skilled companies.
Cross Monetary reported income of $215 million in 2020, up 14% from 2019 with natural progress

round 4%. EBITDA margins have remained strong, helped by expense financial savings.
Following the refinancing, Moody’s estimates that Cross Monetary’s professional forma debt-to-EBITDA will

be round 5.5x with (EBITDA – capex) protection of curiosity round 2.5x and a free-cash-flow-to-

debt ratio within the low-to-mid single digits. These professional forma metrics embody Moody’s changes for

working leases, run-rate earnings from acquisitions and sure different debt-like obligations. The

secure outlook displays Moody’s expectation that Cross Monetary will cut back leverage to about 5x

over the subsequent 12 months via continued EBITDA progress supplemented by tuck-in acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the corporate’s restricted scale and geographic focus, an improve of Cross Monetary’s

rankings is unlikely within the intermediate time period. Components that might contribute positively to the corporate’s

credit score profile embody: (i) elevated scale and geographic diversification, (ii) debt-to-EBITDA ratio

maintained under 4.5x, (iii) (EBITDA – capex) protection of curiosity exceeding 3.5x, and (iv) free-

cash-flow-to-debt ratio exceeding 7%.
The next elements may result in a downgrade of Cross Monetary’s rankings: (i) income decline and/

or disruptions to current or newly acquired operations, (ii) debt-to-EBITDA ratio persistently above

background image
background picture

5.5x, (iii) (EBITDA – capex) protection of curiosity under 2.5x, (iv) free-cash-flow-to-debt ratio under

4%, or (v) deviation from the corporate’s historic monetary insurance policies.
Moody’s has assigned the next ranking to Cross Monetary Corp.:
$450 million (together with pending $100 million enhance) first-lien senior secured time period mortgage maturing

September 2027 at B2 (LGD3).
Moody’s maintains the next rankings on Cross Monetary Corp.:
Company household ranking at B2;
Chance of default ranking at B2-PD;
$80 million (together with pending $10 million enhance) first-lien senior secured revolving credit score facility

maturing September 2025 at B2 (LGD3);
$350 million first-lien senior secured time period mortgage maturing September 2027 at B2 (LGD3) (ranking to be

withdrawn upon closing of the brand new time period mortgage).
The ranking outlook for Cross Monetary Corp. is unchanged at secure.
The principal methodology used on this ranking was Insurance coverage Brokers and Service

Corporations revealed in June 2018 and accessible at

https://www.moodys.com/

researchdocumentcontentpage.aspx?docid=PBC_1121967

. Alternatively, please see the Ranking

Methodologies web page on www.moodys.com for a duplicate of this system.
Based mostly in Bangor, ME, Cross Monetary ranks among the many high 30 US insurance coverage brokers primarily based on 2019

revenues, in response to Enterprise Insurance coverage. The corporate’s product combine is about 60% business

insurance coverage, 25% private and 15% worker advantages and associated merchandise, all distributed to small

and center market companies and people throughout New England. In 2020, Cross generated complete

income of $215 million.
REGULATORY DISCLOSURES
For additional specification of Moody’s key ranking assumptions and sensitivity evaluation, see

the sections Methodology Assumptions and Sensitivity to Assumptions within the disclosure

kind. Moody’s Ranking Symbols and Definitions may be discovered at:

https://www.moodys.com/

researchdocumentcontentpage.aspx?docid=PBC_79004

.

For rankings issued on a program, sequence, class/class of debt or safety this announcement

offers sure regulatory disclosures in relation to every ranking of a subsequently issued bond or

word of the identical sequence, class/class of debt, safety or pursuant to a program for which the

rankings are derived solely from current rankings in accordance with Moody’s ranking practices.

For rankings issued on a help supplier, this announcement offers sure regulatory disclosures

in relation to the credit standing motion on the help supplier and in relation to every specific credit score

ranking motion for securities that derive their credit score rankings from the help supplier’s credit standing.

For provisional rankings, this announcement offers sure regulatory disclosures in relation to the

provisional ranking assigned, and in relation to a definitive ranking which may be assigned subsequent

to the ultimate issuance of the debt, in every case the place the transaction construction and phrases haven’t

modified previous to the task of the definitive ranking in a fashion that may have affected the

ranking. For additional data please see the rankings tab on the issuer/entity web page for the respective

issuer on www.moodys.com.

background image
background picture

For any affected securities or rated entities receiving direct credit score help from the first entity(ies)

of this credit standing motion, and whose rankings could change because of this credit standing motion, the

related regulatory disclosures will likely be these of the guarantor entity. Exceptions to this strategy

exist for the next disclosures, if relevant to jurisdiction: Ancillary Providers, Disclosure to rated

entity, Disclosure from rated entity.
The ranking has been disclosed to the rated entity or its designated agent(s) and issued with no

modification ensuing from that disclosure.
This ranking is solicited. Please check with Moody’s Coverage for Designating and Assigning Unsolicited

Credit score Rankings accessible on its web site www.moodys.com.
Regulatory disclosures contained on this press launch apply to the credit standing and, if relevant, the

associated ranking outlook or ranking evaluation.
Moody’s normal ideas for assessing environmental, social and governance (ESG) dangers in our

credit score evaluation may be discovered at

https://www.moodys.com/researchdocumentcontentpage.aspx?

docid=PBC_1243406

.

The World Scale Credit score Ranking on this Credit score Ranking Announcement was issued by considered one of Moody’s

associates exterior the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt

am Primary 60322, Germany, in accordance with Artwork.4 paragraph 3 of the Regulation (EC) No

1060/2009 on Credit score Ranking Companies. Additional data on the EU endorsement standing and on the

Moody’s workplace that issued the credit standing is offered on www.moodys.com.
The World Scale Credit score Ranking on this Credit score Ranking Announcement was issued by considered one of Moody’s

associates exterior the UK and is endorsed by Moody’s Traders Service Restricted, One Canada

Sq., Canary Wharf, London E14 5FA beneath the legislation relevant to credit standing companies within the UK.

Additional data on the UK endorsement standing and on the Moody’s workplace that issued the credit score

ranking is offered on www.moodys.com.
Please see www.moodys.com for any updates on adjustments to the lead ranking analyst and to the

Moody’s authorized entity that has issued the ranking.
Please see the rankings tab on the issuer/entity web page on www.moodys.com for extra regulatory

disclosures for every credit standing.
Chris Scott

AVP-Analyst

Monetary Establishments Group

Moody’s Traders Service, Inc.

250 Greenwich Road

New York, NY 10007

U.S.A.

JOURNALISTS: 1 212 553 0376

Shopper Service: 1 212 553 1653
Sarah Hibler

Affiliate Managing Director

Monetary Establishments Group

JOURNALISTS: 1 212 553 0376

Shopper Service: 1 212 553 1653

background image
background picture

Releasing Workplace:

Moody’s Traders Service, Inc.

250 Greenwich Road

New York, NY 10007

U.S.A.

JOURNALISTS: 1 212 553 0376

Shopper Service: 1 212 553 1653

© 2021 Moody’s Company, Moody’s Traders Service, Inc., Moody’s Analytics, Inc. and/or their

licensors and associates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY’S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT

OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS,

OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND

INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE

SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN

ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME

DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT.

SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR

INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED

BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK,

INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE

VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND

OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS

OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE

QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS

OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO

NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S

CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND

DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR

SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND

PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY

PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND

OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND

UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY

AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE,

HOLDING, OR SALE.
MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS

ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS

AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS,

ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT

DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER

PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT

LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR

background image
background picture

OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,

DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR

ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY

MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE

NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED

FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT

IN THEM BEING CONSIDERED A BENCHMARK.
All data contained herein is obtained by MOODY’S from sources believed by it to be

correct and dependable. Due to the opportunity of human or mechanical error in addition to different

elements, nonetheless, all data contained herein is offered “AS IS” with out guarantee of any type.

MOODY’S adopts all crucial measures in order that the knowledge it makes use of in assigning a credit score

ranking is of adequate high quality and from sources MOODY’S considers to be dependable together with, when

acceptable, unbiased third-party sources. Nevertheless, MOODY’S isn’t an auditor and can’t

in each occasion independently confirm or validate data obtained within the ranking course of or in

making ready its Publications.
To the extent permitted by legislation, MOODY’S and its administrators, officers, workers, brokers,

representatives, licensors and suppliers disclaim legal responsibility to any individual or entity for any oblique,

particular, consequential, or incidental losses or damages by any means arising from or in connection

with the knowledge contained herein or using or lack of ability to make use of any such data, even when

MOODY’S or any of its administrators, officers, workers, brokers, representatives, licensors or suppliers

is suggested prematurely of the opportunity of such losses or damages, together with however not restricted to:

(a) any lack of current or potential earnings or (b) any loss or harm arising the place the related

monetary instrument isn’t the topic of a specific credit standing assigned by MOODY’S.
To the extent permitted by legislation, MOODY’S and its administrators, officers, workers, brokers,

representatives, licensors and suppliers disclaim legal responsibility for any direct or compensatory losses

or damages brought about to any individual or entity, together with however not restricted to by any negligence (however

excluding fraud, willful misconduct or every other kind of legal responsibility that, for the avoidance of doubt,

by legislation can’t be excluded) on the a part of, or any contingency inside or past the management of,

MOODY’S or any of its administrators, officers, workers, brokers, representatives, licensors or suppliers,

arising from or in reference to the knowledge contained herein or using or lack of ability to make use of

any such data.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,

COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF

ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE

BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Traders Service, Inc., a wholly-owned credit standing company subsidiary of Moody’s

Company (“MCO”), hereby discloses that the majority issuers of debt securities (together with company and

municipal bonds, debentures, notes and business paper) and most popular inventory rated by Moody’s

Traders Service, Inc. have, previous to task of any credit standing, agreed to pay to Moody’s

Traders Service, Inc. for credit score rankings opinions and companies rendered by it charges starting from

$1,000 to roughly $5,000,000. MCO and Moody’s Traders Service additionally preserve insurance policies

and procedures to deal with the independence of Moody’s Traders Service credit score rankings and credit score

ranking processes. Data relating to sure affiliations which will exist between administrators of MCO

and rated entities, and between entities who maintain credit score rankings from Moody’s Traders Service and

have additionally publicly reported to the SEC an possession curiosity in MCO of greater than 5%, is posted

background image
background picture

yearly at

www.moodys.com

beneath the heading “Investor Relations — Company Governance —

Director and Shareholder Affiliation Coverage.”
Further phrases for Australia solely: Any publication into Australia of this doc is pursuant to the

Australian Monetary Providers License of MOODY’S affiliate, Moody’s Traders Service Pty Restricted

ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136

972 AFSL 383569 (as relevant). This doc is meant to be offered solely to “wholesale

purchasers” throughout the which means of part 761G of the Companies Act 2001. By persevering with to entry

this doc from inside Australia, you signify to MOODY’S that you’re, or are accessing

the doc as a consultant of, a “wholesale consumer” and that neither you nor the entity you

signify will straight or not directly disseminate this doc or its contents to “retail purchasers” inside

the which means of part 761G of the Companies Act 2001. MOODY’S credit standing is an opinion as

to the creditworthiness of a debt obligation of the issuer, not on the fairness securities of the issuer or

any type of safety that’s accessible to retail buyers.
Further phrases for Japan solely: Moody’s Japan Ok.Ok. (“MJKK”) is a wholly-owned credit standing company

subsidiary of Moody’s Group Japan G.Ok., which is wholly-owned by Moody’s Abroad Holdings Inc.,

a wholly-owned subsidiary of MCO. Moody’s SF Japan Ok.Ok. (“MSFJ”) is a wholly-owned credit standing

company subsidiary of MJKK. MSFJ isn’t a Nationally Acknowledged Statistical Ranking Group

(“NRSRO”). Due to this fact, credit score rankings assigned by MSFJ are Non-NRSRO Credit score Rankings. Non-

NRSRO Credit score Rankings are assigned by an entity that isn’t a NRSRO and, consequently, the rated

obligation is not going to qualify for sure sorts of remedy beneath U.S. legal guidelines. MJKK and MSFJ are credit score

ranking companies registered with the Japan Monetary Providers Company and their registration numbers

are FSA Commissioner (Rankings) No. 2 and three respectively.
MJKK or MSFJ (as relevant) hereby disclose that the majority issuers of debt securities (together with

company and municipal bonds, debentures, notes and business paper) and most popular inventory rated

by MJKK or MSFJ (as relevant) have, previous to task of any credit standing, agreed to pay to

MJKK or MSFJ (as relevant) for credit score rankings opinions and companies rendered by it charges ranging

from JPY125,000 to roughly JPY550,000,000.
MJKK and MSFJ additionally preserve insurance policies and procedures to deal with Japanese regulatory

necessities.

Supply hyperlink

About admin

Check Also

Why is life insurance coverage costlier for males?

Naomi Bishop Final up to date on: 05 Apr 2021 In case you are trying …