Moody's assigns Luna III B1

Moody's Investors Service said it assigned a B1 corporate family rating and a B1-PD probability of default rating to Luna III Sarl, the future holding company of Urbaser SAU. This is the first time that Moody's has rated Luna III.

Concurrently, Moody's gave a B1 rating to Luna III's proposed €1.63 billion senior secured term loan facility, €400 million senior secured revolving credit facility and backstop senior secured guarantee facility.

Platinum Equity will use Luna to acquire Urbaser. “The ratings primarily reflect the credit quality of Urbaser, the group´s main subsidiary which operates in the collection, treatment and recycling of solid urban waste. These activities are underpinned by medium and long-term contracts with publicly-owned counterparties across different geographies and together represented around 86% of the company´s consolidated EBITDA at the end of 2020. The ratings also consider the group´s high pro forma leverage as well as its exposure to contract renewal risk,” Moody’s said in a press release.

The agency said it forecasts a ratio of gross debt to EBITDA (as adjusted by Moody´s) around 5x in the 12-18 months after the deal closes.

The outlook is stable.

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