Moody rates Bakelite, loan B1

Moody's Investors Service said it gave a B1 corporate family rating and B1-PD probability of default rating to Bakelite US Holdco, Inc. The agency also rated the company’s $485 million seven-year senior secured term loan B1.

The proceeds will be used to fund the $425 million acquisition of Georgia Pacific’s chemicals business, refinance indebtedness at Bakelite UK Holding Ltd. and pay related transaction fees and expenses. Moody’s said it will withdraw Bakelite UK’s ratings once its debt is repaid.

"The acquisition of GP chemicals roughly doubles Bakelite's revenues and EBITDA but is virtually leverage neutral and is complimentary to Bakelite's existing platforms in the U.S. and Europe and a good fit with Bakelite's leading formaldehyde-based phenolic resin business. The combined business generated pro forma TTM September 2021 revenue and adjusted EBITDA of $1.3 billion and $149 million (~11.6% margin), respectively, with pro forma total net leverage of 3.2x," according to Joseph Princiotta, a Moody’s senior vice president and senior analyst, in a press release.

The outlook is stable.

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