Moody’s assigns Huntsworth B3, loan B2

Moody’s Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to CD&R Artemis Holdco 3 Ltd. (Huntsworth).

Huntsworth operates with a highly levered capital structure characterized by Moody’s adjusted gross debt/EBITDA hovering around 7x in 2020. Nevertheless, Moody’s said it believes beyond 2020 the company has the potential to lower toward 6x.

Concurrently, Moody’s assigned B2 ratings to the $300 million senior secured first-lien term loan and pari passu ranking £45 million senior secured revolving credit facility, maturing in 2027 and 2026 respectively and for which CD&R Artemis UK Bidco Ltd. and CD&R Artemis Bidco Inc. are the co-borrowers.

The B2 ratings on the £45 million senior secured first-lien revolver and $300 million senior secured first-lien term loan, one notch above the CFR, reflect their priority ranking ahead of the £75 million senior secured second-lien facility in the event of security enforcement and £45 million of lease obligations, Moody’s said.

The proceeds were used to finance the group’s acquisition by financial sponsor Clayton, Dubilier and Rice and pay for the transaction fees and expenses.

The outlook is stable. “The stable outlook reflects Moody’s expectation that the group will offset any customer or project losses by new wins and therefore grow EBITDA on a like-for-like basis, leading to gradual deleveraging,” the agency said in a press release.

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