S&P places Paysafe on CreditWatch Positive
S&P Global Ratings today placed Paysafe on CreditWatch Positive due to its planned merger with Foley Trasimene and listing on NYSE.
Following the merger with the special-purpose acquisition corporation (SPAC), Paysafe will raise about $6.9 billion of equity, valuing the company at $9 billion pro forma the debt repayment. The merger agreement stipulates the repayment of about $1.12 billion of gross debt from new equity. As a result, S&P expects Paysafe’s S&P Global Ratings-adjusted leverage to fall to about 5.0x-5.5x (4.0x-4.5x on a net debt basis) in 2021 from about 9.0x-9.5x in 2020.
The public listing is estimated to reduce Paysafe’s financial sponsor ownership, which S&P views as credit positive, although there is limited visibility on the company’s new financial policy at this stage.
“We see the listing on the New York Stock Exchange as credit positive as it will lower both the financial sponsors’ ownership stake in Paysafe and the risk of a dividend recapitalization”, S&P says.
Let’s recall that Paysafe announced its merger with Foley Trasimene on December 7, 2020. Upon closing of the transaction, the newly combined company will operate as Paysafe and plans to list on the NYSE under the symbol PSFE. The transaction reflects an implied pro-forma enterprise value for Paysafe of approximately $9 billion.
Completion of the transaction is subject to approval by Foley Trasimene stockholders, the effectiveness of a registration statement to be filed with the Securities and Exchange Commission (SEC) in connection with the transaction, and other customary closing conditions, including the receipt of certain regulatory approvals. The transaction is expected to close in the first half of 2021.