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Banks (Finance)

Moody's Assigns Ba1 Rating to Victory Capital Holdings' Senior Secured Debt

Strategic Insights

— 2 min read

Victory Capital Holdings, a leading asset management firm, has secured a Ba1 rating for its newly issued senior secured first lien term loan B and revolving credit facility. This rating reflects the company's strong financial position, solid cash flow generation, and modest financial leverage. The outlook for the ratings is positive, driven by expected inflows into the company's ETF platform and a strategic partnership with Amundi SA, which is expected to enhance its competitive positioning and support organic asset growth.

Key Takeaways:

  • Moody's assigned a Ba1 rating to Victory Capital Holdings' senior secured first lien term loan B and revolving credit facility, reflecting the company's strong financial position and solid cash flow generation.
  • The corporate family rating and probability of default rating remain unchanged following the company's planned amend-and-extend (A&E) of its bank credit facility.
  • The A&E transaction is credit positive, as it improves the company's debt maturity profile and preserves its covenant-lite structure.
  • Victory's Ba1 senior secured debt rating reflects its modest financial leverage, strong profitability, and solid cash flow generation, offset by ongoing asset redemptions, earnings sensitivity to broad financial markets, and a significant exposure to retail distribution channels.
  • The positive outlook on the ratings reflects stronger-than-expected inflows into the company's ETF platform and the expectation that its strategic partnership with Amundi SA will enhance its competitive positioning and support organic asset growth.
  • Factors that could lead to an upgrade of the ratings include net asset inflows, sustained financial leverage below 2.0 times debt-to-EBITDA, and improved geographic diversification.
  • Factors that could result in a ratings downgrade include net client redemptions in excess of 2% of managed assets, sustained financial leverage above 3.0 times debt-to-EBITDA, and a deterioration in profitability such that GAAP pretax income margins fall below 25%.
  • The company plans to use the proceeds from the new debt to refinance its existing term loan and revolving credit facility.

Statistics:

  • Victory Capital Holdings' corporate family rating and probability of default rating remain unchanged following the A&E transaction.
  • The company's corporate family rating is Ba1, with a probability of default rating of Ba1.
  • Moody's expects the company's financial leverage to remain below 3.0 times debt-to-EBITDA following the A&E transaction.
  • Victory's debt maturity profile is expected to improve, with the A&E transaction extending the maturity of the company's term loan to 2032 and its revolving credit facility to 2030.
  • The company's profitability is expected to remain strong, with GAAP pretax income margins expected to remain above 25%.

Sources:

  • Moody's Ratings, "Moody's Assigns Ba1 Rating to Victory Capital Holdings' Senior Secured Debt" (September 2025)
  • Moody's Investors Service, "Moody's Ratings Methodologies" (May 2024)
  • Moody's Investors Service, "Rating Methodologies" (https://ratings.moodys.com)

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