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Investing.com -- Moody’s Ratings has affirmed Allspring Intermediate II LLC’s corporate family rating at Ba3 while changing the outlook from stable to positive.
The rating agency also affirmed Allspring Buyer LLC’s backed senior secured term loan and revolving credit facility ratings at Ba3. Additionally, Moody’s assigned a Ba3 rating to Allspring Buyer’s backed senior secured first lien revolving credit facility due 2029.
The improved outlook reflects significant progress in Allspring’s financial and operating metrics since Moody’s downgraded the company in July 2024. The company’s debt-to-EBITDA ratio has decreased to 4.0x as of Q1 2025, down from 5.4x in the same period last year.
This leverage reduction stems from market appreciation combined with $71 billion in cost savings over the past year. The company has also shown improved net flows, though still negative, with market share gains in US intermediary and international distribution channels. Fixed income net flows reached $12 billion in 2024, excluding stable value.
Moody’s noted Allspring is making progress on strategic growth initiatives, including its Remi customized separately managed account platform. The positive outlook also reflects the company’s commitment to maintain financial leverage below 4.5x.
The Ba3 rating acknowledges Allspring’s moderate revenue scale, diversified asset classes, strong money market business, and solid distribution channel presence. However, the rating remains constrained by high leverage, weak profit margins, and persistent net long-term outflows, despite recent improvements in these areas.
Moody’s indicated an upgrade could occur if Allspring sustains debt-to-EBITDA below 4.5x, maintains pre-tax income margin above 10%, and shows continued improvement in long-term net flows.
While a downgrade is unlikely given the positive outlook, Moody’s could affirm the Ba3 rating with a stable outlook if debt-to-EBITDA exceeds 4.5x, pre-tax income margin remains below 5.0%, large long-term net outflows return, or additional dividend recapitalization transactions occur.
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