Moody's rates Bruneau, loans B2

Moody's Investors Service said it assigned a first-time B2 corporate family rating and B2-PD probability of default rating to Boost Holdings 2, the new holding company for Bruneau. Concurrently, the agency gave B2 ratings, with a loss given default assessment of LGD3, to the planned €305 million guaranteed senior secured term loan B and €60 million guaranteed senior secured revolving credit facility.

"Bruneau's B2 rating reflects the company's well established position in the online business-to-business (B2B) distribution of office supplies in France and Benelux region, its good track record of profitable growth and its asset-light and agile business model," said Guillaume Leglise, a Moody's vice president and senior analyst, in a press release.

"In addition, the company presents good credit metrics with an opening leverage of 4.1x and a strong free cash flow generation, which position the company comfortably in its rating category. However, the rating also incorporates Bruneau's small scale, its inherent exposure to small- and medium-sized enterprises (SMEs) and economic cycles, and the highly competitive nature of the industry," added Leglise.

The loan proceeds will be used to repay certain debts and partly pay the equity value of the company as part of the change in ownership and pay related transaction costs.

The outlook is stable.

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