Moody’s affirms Autodis

Moody's Investors Service said it affirmed the B2 corporate family rating and B2-PD probability of default rating of Dakar Finance SA (Autodis).

The agency also affirmed the B2 rating on the senior secured fixed-rate and floating-rate notes due 2022 and issued by Autodis SA. This also includes the new €175 million add-on to the existing floating-rate notes.

The outlook is stable.

Net proceeds from the additional notes will be used to fully redeem the €64 million of outstanding senior pay-if-you-can (PIYC) notes due 2020 at Dakar, as well as repay the €62 million currently drawn under the revolving credit facility due 2020. Following the repayment, €46 million will be left on the balance sheet for general corporate purposes including, in part, potential acquisitions.

The Caa1 rating on the senior PIYC notes is unchanged and will be withdrawn upon redemption of the notes.

Concurrently, Moody's said it expects to move the corporate family rating to Autodis Group SAS, which is the top entity of restricted group for the senior secured notes, from Dakar.

“We view Autodis' CFR as weakly positioned due to the high Moody's-adjusted leverage of 7.0x at closing but expect the leverage to reduce toward 6.0x in the next 12 to 18 months, driven by modest organic growth, procurement synergies and EBITDA-accretive acquisitions funded with excess cash," Eric Kang, Moody's lead analyst for Autodis, said in a news release.

"However, the company's acquisitive strategy could slow the deleveraging profile if future acquisitions are funded with additional debt."

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