Moody's has affirmed Janus Capital Group Inc.'s long-term senior debt ratingand revised its outlook after the company announced plans to conduct anall-stock merger withHenderson Group Plc.
Citing increased benefits for bondholders through lowerleverage, enhanced scale and the possibility for cost reductions from thetransaction, Moody's changed Janus' rating outlook to positive from stable.Moody's also affirmed Janus' long-term issuer rating at Baa3, saying itreflected the company's position as a mid-sized provider of investment fundsand services to institutional investors primarily in the U.S.
Upon the deal's closing, Janus Henderson Global Investors isexpected to have more than $320 billion in assets under management and acombined market capitalization of approximately $6 billion, the companies said.
Under the deal, Janus shareholders are expected to own 43%of the combined company upon closing with Henderson shareholders owning theremaining 57%. Moody's noted that the new entity is also expected to haveannual revenue exceeding $2 billion, while expanding its base in the U.S., U.K.and Asia-Pacific regions.
The outlook could be downgraded if the company suffersorganic net outflows over the next 12 to 18 months, Moody's noted in itsanalysis.