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Moody's assigns Medline B1
Moody's Investors Service said it assigned a B1 rating to Medline Borrower, LP planned offering of $3.77 billion of senior secured notes and a Caa1 rating to the upcoming offering of $4 billion of senior unsecured notes.
“The B1 rating assigned to the proposed senior secured notes reflects their senior secured interest in substantially all assets of Medline. The senior secured notes rank pari passu with the company's senior secured bank loans. The Caa1 rating assigned to the senior unsecured notes reflects their junior ranking positive vis-a-vis the substantial amount of secured debt in Medline's capital structure,” the agency said in a press release.
“There is no change to the company's B2 corporate family rating, the B2-PD probability of default rating, or the B1 rating assigned to the company's senior secured bank credit facilities,” Moody’s said. The outlook remains stable. Medline Borrower, LP was previously named Mozart Borrower, LP.
The Blackstone Group, the Carlyle Group and Hellman & Friedman LLC are acquiring Medline in a deal that values Medline at about $34 billion.
The note proceeds, an unrated CMBS bridge facility of $2.2 billion and senior secured bank loans of about $7 billion will be used to fund a portion of purchase price. Total equity of about $16.7 billion, including a rollover of equity from the Mills family, Medline’s current owners, will be used to fund the balance of the purchase price.
“The sponsors and other investors will own a significant majority of the company with the balance held by the Mills family. Moody's expects that leverage will remain elevated at around seven times over the next 12 to 18 months,” the agency said.
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